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Nov 24, 2006

Vodacom rolls out 3G network in Tanzania

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Africa|Business|Engineering|Technology|Africa|Democratic Republic Of Congo|Tanzania|Service|Services|Operations
Africa|Business|Engineering|Technology|Africa|Democratic Republic Of Congo|Tanzania|Service|Services|Operations
africa-company|business|engineering|technology|africa|democratic-republic-of-congo|tanzania|service|services|operations
The demand for broadband is picking up in African countries outside South Africa and cellular service providers are viewing the increasing requirements for Internet and other data services as a significant opportunity for growth.

One of the largest mobile communications providers in Africa, Vodacom, will be rolling out the first third-generation (3G) network in Tanzania at the beginning of next year.

Tanzania will be the first country outside South Africa in which the company will roll out 3G.

Third-generation technology allows for higher data speed access, which brings services to the market, such as video calling and broadband access to the Internet and email services.

While 3G networks are more expensive to roll out than second-generation networks, 3G technology can support greater numbers of voice and data customers at lower incremental costs.

Vodacom COO Pieter Uys tells Engineering News that the com-pany is experiencing a large need for data services among existing customers in Tanzania.

Year-on-year data revenue from the company’s Tanzanian operations was up 30% at R65-million.

The company currently has 2,6-million subscribers in Tanzania, and expects to have more than three-million customers in the next year. Uys says that Tanzania has the largest use of short message ser-vices among the firm’s subscribers in the rest of Africa, which highlights the growing requirement for data services.

He points out that all the 3G towers in Vodacom’s network in South Africa are high-speed downlink packet access (HSDPA) enabled.

HSDPA deployments support data transfer speeds of up to 3,6 Mbit/s. Even greater HSDPA transfer rates are under development. Uys says that, while there is a growing demand for data services that can be met by the roll-out of 3G in Africa, it remains a challenge for service providers to balance the capital expenditure (capex) requi-red for roll-out with the return on imvestment. “We carefully evaluate the business case before committing to investment,” he adds.

In the last year, Vodacom in Tanzania increased capex as a percentage of revenue from 17% to 37,3%.

The company’s market share in the country, which has 37,4-million inhabitants, is 55% and cellular pene- tration in Tanzania is 12,6%. In South Africa, Vodacom recorded growth in data revenue of 64,1% from last year’s R1,35-billion.

The strong growth in data revenue is attributed to the availability of handsets and new technologies, such as 3G, HSDPA, Vodafone live!, Blackberry push email and Vodacom’s mobile TV service.

Besides South Africa and Tanzania, the company also has operations in the Democratic Republic of Congo, Lesotho, and Mozambique.

In these operations, revenue from data grew by 40,9% year-on-year to R31-million.

Speaking at the company’s interim results presentation, Vodacom CEO Alan Knott-Craig said that the company would “aggressively drive” its presence in the data market to increase revenues and to create greater overall customer loyalty.
Edited by: Helene Le Roux

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