Vodacom Tanzania is looking to leverage the swelling areas of mobile data and M-Pesa to aggressively grow its business in the East African country, one of the five that SA's first mobile operator has operations in on the continent.
Addressing the media in the Tanzanian capital of Dar es Salaam yesterday, Vodacom Tanzania MD Rene Meza said the operator's business strategy was focused heavily on network investment, mobile data, its mobile money service M-Pesa, distribution and brand.
M-Pesa, which launched in Tanzania - at first with limited success - in 2008, has proven to be one of the services the operator feels it can leverage to up profits in an age in which revenues from traditional voice and SMS services are dwindling.
To date, about 55% of Vodacom Tanzania's subscribers are actively using the mobile money service, which Meza says is still seeing between 100 000 and 150 000 net subscriber additions per month.
Vodacom has about six million M-Pesa users across its Southern African operations, a number it hopes to see rise to 11 million within the next three years, according to Romeo Kumalo, COO of Vodacom International.
Following the recent re-launch of M-Pesa in SA - initially introduced in the country in 2010 - Vodacom indicated it aimed to sign up 10 million subscribers to the service by 2019. Apart from Tanzania and SA, the telco also has operations in the Democratic Republic of Congo, Mozambique and Lesotho.
Mobile data
Kumalo says mobile data is another area the operator has seen considerable growth in, and hopes to leverage to meet revenue targets.
However, he notes, revenue from mobile data - which has grown significantly in parallel with the proliferation of smartphones - has not yet made as significant a mark on the operator's bottom line as it could have. "In Tanzania, there is massive growth in data traffic, but we need to price [data] up a bit. Our aim was to get customers to try using data first - and in the long term to introduce integrated bundles, to increase average revenue per user."
Kumalo notes the operator is investing heavily in its network in order to meet the burgeoning demand for data. "Someone has to pay for the investment we are putting in to the network. But at the moment, there is a land grab for market share. You need customers first before you can up the price."
He says, while the rise of low-cost smartphones holds great potential for consumer uptake of mobile data, the $50 mark that has to date been achieved is still too high for many of Africa's developing nations. "I think the sweet spot for a data-capable handset in Africa is $25 - that is the point at which we will see massive take-up.
"Most people in Africa will experience the Internet on their handset for the first time and, while it is about affordable data, it is also about cheaper handsets. In the past, we have made data too cheap - almost giving data away - now we need to make devices affordable and bring data pricing in line with what we are able to."
He says Vodacom needs to put pressure on manufacturers to make $25 handsets a reality, "and I don't think this is too far off".
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