R/€ = 14.89
R/$ = 10.74
Au 1340.92 $/oz
Pt 1483.50 $/oz
May 20, 2002
DRC prepares for big cellular investmentBack
Goma|Kinshasa|Lubumbashi|Mbuji-Mayi|BMI|Hosken Consolidated Investments|Systems|VenFin|Vodacom|Vodacom Congo|Vodafone|Africa|Britain|Congo|Democratic Republic Of Congo|South Africa|USD|Kinshasa Hotel|Costly Network|Mobile Operator|Non-mining Investment|International Telecommunication Union|United Nations|Dobek Pater|Henry Stephan|Mobutu Sese Seko|Vic Subramanian|Cellular Telephone|Mobile Phones
© Reuse this When Africa’s biggest mobile operator Vodacom offered $5 of free airtime to new clients in the Democratic Republic of Congo it sparked a mini-riot.
Security guards were called in to break up shoving matches between hundreds of people in the lobby of a flashy Kinshasa hotel, where Vodacom booths had been set up ahead of the launch earlier this month.
And when Celtel, currently Congo’s leading provider, cut its rates by 20% in anticipation of Vodacom’s launch, traffic shot up and clogged the company's networks for days.
Demand for mobiles is huge in the war-torn central African country and Vodacom Congo will become the eighth network provider. Most arrived in the past 18 months.
The former Zaire was the first African country to have mobile phones with the launch of a small, costly network in the mid-1980s, but only about 150 000 of Congo’s 55-million people currently use them.
Congo’s State-run fixed network, numbering around 20 000 landlines according to the most recent estimates, is unreliable. Users complain of regular interruptions to services and say numbers can be arbitrarily assigned to new users, making mobiles a more popular option.
Executives like Henry Stephan, Vodacom Congo’s chief operating officer, are betting on a surge of new users.
“We expect the number of mobile phone users to jump to about 600 000 in the next five years and then reach one million within a decade,” Stephan said.
Others estimate the market could reach three-million users.
Vodacom plans to spend $370-million in the first year of operations – the largest non-mining investment in Congo’s history according to a report on the country’s telecoms by BMI-TechKnowledge, an African IT and telecoms research house.
The rapid growth in Congo reflects an Africa-wide explosion in mobile use, with user numbers rocketing from two million in 1998 to more than 30-million by the end of 2001, according to the United Nations’ International Telecommunication Union.
The organisation predicts 100-million Africans will own cellphones by 2005 and says the number of mobile users has already outpaced that of fixed-line phones.
Africa has had mobiles since the 1980s, but they only really took off in the mid-1990s with the arrival of pre-paid billing.
Pre-paid cards allow companies to collect money in places where steady incomes, fixed addresses, credit checks, reliable banking and postal systems do not exist.
Under the late dictator Mobutu Sese Seko, who was ousted in 1997, mobiles were the preserve of an elite of barely 20 000 in the former Zaire who paid up to $3 per minute for local calls.
“We have tried to make phones more accessible to the masses,” says Vic Subramanian, marketing manager for Celtel, which serves two thirds of Congo’s users.
Industry analysts say that not only can better communications encourage business and drive economic growth, but they also lead to greater democratic freedom in countries like Congo that have known decades of dictatorship.
“There is a correlation between mobile communications and the spread of democracy,” said Dobek Pater, a senior analyst with BMI-TechKnowledge.
The big challenge for the Congolese is bringing the vast mineral-rich territory back together after four years of war that have seen it carved up into fiefdoms ruled by rebel factions and an unelected government.
Recent peace talks fuelled hopes that the former Belgian colony might turn the corner, but after eight weeks they broke up without an overall agreement and some analysts warned of a possible return to all-out war.
“With the war and the constant government hassles it is a high risk market and a difficult environment to work in.
“How do you explain to your head office that you have to give 100 free phones to government ministers and their assistants and friends,” said one telecoms official who asked not to be identified.
Vodacom is half owned by South Africa’s State-controlled telecoms utility Telkom. Britain’s Vodafone owns 31,5% of Vodacom, South African group VenFin holds 13,5% and the investment holding company Hosken Consolidated Investments the remaining 5%.
It began its operations in the three major markets in Congo -- the capital Kinshasa, the diamond-mining city of Mbuji-Mayi and Lubumbashi, capital of the mineral-rich south-eastern province of Katanga.
It has plans to roll out into new markets over the coming year, including rebel-held areas like Goma in the east.
“If we can get it so that people in Goma can talk to people in Kinshasa it will only help bring the country together,” said Vodacom’s Stephan.
“This country has such potential it is incredible.” – Reuters © Reuse this Comment Guidelines
Other Business Process Outsourcing News
MTN Business has entered an “exciting” era as the telecommunications group shifts from being a predominantly mobile operator to becoming an end-to-end integrated technology solutions provider in a “new world” of business. MTN aimed to distinguish its rapidly...
Virtualisation is a disruptive information technology (IT) trend, but companies can use rental and managed services to test virtualisation while addressing specific goals or challenges, says recovery specialist company Veeam South Africa manager Warren Olivier....
Cloud email service specialist Mimecast will add new capabilities to the existing functionality of its cloud services platform and this year’s focus is on expanding its presence in terms of existing clients and new clients, says Mimecast MD Brandon Bekker. The...
Updated 6 hours ago On the back of its first load-shedding event in over six years, Eskom has warned the system will remain constrained, saying on Friday that that the risk of “emergency conditions” developing would remain well into April, owing to high levels of planned maintenance...
Updated 6 hours ago Transnet National Ports Authority (TNPA) and the US Port of Miami are to collaborate on vital skills and training after signing a memorandum of understanding (MoU) in Cape Town. Delegations from the US and South Africa agreed that there were numerous opportunities to...
Updated 7 hours ago Telecommunications group Telkom and South Africa’s second-largest mobile operator MTN on Friday entered into a heads of agreement, the conclusion of which would allow the duo to roam on each other’s network and enable Telkom to derisk its mobile unit. It would...
Recent Research Reports
Automotive 2014: A review of South Africa's automotive sector (PDF Report)
The report provides insight into the business environment, the key participants in the sector, local construction demand, geographic diversification, competition within the sector, corporate activity, skills, safety, environmental considerations and the challenges...
Construction 2014: A review of South Africa's construction sector (PDF Report)
Construction data released during 2013 hints at a halt to the decline in the industry during the last few years, with some commentators averring that the industry could be poised for recovery. However, others have urged caution, noting that the prospects for a...
Electricity 2014: A Review of South Africa's Electricity Sector (PDF Report)
This report provides an overview of the state of electricity generation and transmission in South Africa and examines electricity planning, investment in generation capacity, electricity tariffs, the role of independent power producers and demand-focused initiatives,...
Defence 2013: A review of South Africa's defence industry (PDF Report)
Creamer Media’s 2013 Defence Report examines South Africa’s defence industry, with particular focus on the key players in the sector, the innovations that have come out of the defence sector, local and export demand, South Africa’s controversial...
Road and Rail 2013: A review of South Africa's road and rail infrastructure (PDF Report)
Creamer Media’s Road and Rail 2013 Report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Liquid Fuels 2013 (PDF Report)
Creamer Media’s 2013 Liquid Fuels report examines South Africa’s liquid fuels market, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing,...
This Week's Magazine
A structured approach, wherein managers personally engage at each level of the project, is necessary to mitigate delays to the workflow on mega construction projects, says State-owned Eskom Kusile power station projects GM Abram Masango. The 4 800 MW Kusile power...
Construction of transmission lines to evacuate power from a regional hydroelectric project in East Africa, which was hanging on the balance following the withdrawal of financing by key partners, is now back on track. After six months of uncertainty, the African...
Three Memorandums of Understanding (MoUs) were signed between South African and Malaysian companies at the Malaysian High Commission in Pretoria on Friday. These MoUs are part of the indirect offsets programme South Africa is providing in return for Malaysia’s...
The South African new vehicle market may well dip to 640 000 units in 2014, says Toyota South Africa Motors (TSAM) sales and marketing senior VP Calvyn Hamman. This is the first prediction that anticipates a drop in the market. To date economists and industry bodies...
Nissan will re-enter the South African minibus taxi industry in March, when the new NV350 Impendulo goes on sale. The 16-seater has been specifically tailored to meet the terms of government’s Taxi Recapitalisation Programme, which aims to replace South Africa’s...