South African mobile operator Vodacom is hoping 25 per cent of its service revenues will come from service revenues such as fibre and cloud services in the next five years.
Vuyani Jarana, chief officer of Vodacom Business, said the division currently accounts for 16 per cent of the operator’s revenues and has invested ZAR2 billion (US$200 million) in the last five years.
“The obvious question is what changed and why do we now expect to deliver such significant growth? I can boil it down to three key things: our infrastructure and skills backbone, reaching critical mass, and linking up with Vodafone’s enterprise unit to expand our capabilities from pan-African to truly global,” he said.
Small and medium enterprises (SMEs) are the targets for Vodacom as it looks for expansion, with Vodacom Business having previously focused on large corporates.
“We historically focused on corporate clients and didn’t have the scale or products to tackle the huge and rapidly growing SME segment,” Jarana said. “A side-effect of Vodacom’s consumer business providing high speed, high capacity links to base stations is that we’ve been able to piggy-back off this expanded reach and can now offer enterprise solutions to smaller businesses as well.”
Jarana said the launch of One Net Express was already seeing good traction in South Africa, while machine to machine (M2M) was another major growth area.
He also emphasised the importance of the linkage with Vodafone for Vodacom’s push into new revenue areas.
“Vodafone has over 32 million mobile enterprise customers worldwide, and this segment makes up 27 per cent of Vodafone Group’s service revenue,” he said.
“With this kind of experience to draw on coupled with our strong network backbone and ability to tap into growth opportunities in things like SMEs and M2M, we think reaching our target of 25 per cent of Vodacom South Africa’s service revenue within five years is a realistic goal.”
He said making a success out of the enterprise model had not been easy.
“Our original plan was to grow Vodacom Business through acquisition, but the right opportunities didn’t come up. We went back to the drawing board and looked at what technical assets and what people skills we needed, and have spent the last few years building an entirely new platform,” Jarana said.
