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Vodacom pushes for DRC growth

The operator aims to double its subscriber base in the next five years.

Tyson Ngubeni
By Tyson Ngubeni
Johannesburg, 20 May 2014
Vodacom Group will look to increase its stake in its Congolese operation.
Vodacom Group will look to increase its stake in its Congolese operation.

The end of Vodacom's dispute with its Democratic Republic of Congo (DRC) business partner, Congo Wireless Network (CWN), will help retain and grow its subscriber base as it seeks to gain traction in the central African nation, says Vodacom Group CEO Shameel Joosub.

Joosub announced yesterday that the International Chamber of Arbitration ruled in Vodacom's favour, following a long-running dispute over a funding agreement with Congolese shareholder CWN.

Joosub has targeted greater control of the country, as the company looks forward. "If it could get a bigger stake - increasing its 51% to a larger chunk - the company could capitalise the operation better," he says.

Richard Boorman, Vodacom spokesperson, says the company has 10 million subscribers in the DRC, but hopes to double this figure within the next five years.

More work needed

While Vodacom Congo remains profitable in the DRC, says Joosub, its churn rate "is the highest out of all Vodacom's international operations - at 76.6%".

Average revenue per user each month has some headroom to grow, as its results show this is at R35, lagging Tanzania (R45), Mozambique (R58) and Lesotho.

Richard Hurst, Ovum analyst, says the high churn rate is "symptomatic of that type of market, where subscribers struggle with coverage in certain areas of the country". He says the end of Vodacom's dispute with CWN should see the company working to address infrastructure challenges that could help retain users.

Other challenges to Vodacom's growth include low disposable income for DRC subscribers, says Hurst, and ongoing conflict could also affect infrastructure development.

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