Vodacom today announced its plans to launch a cellular network operation in Mozambique within the next eight months. This follows the year-long negotiation of an interconnection agreement between Vodacom and Mozambique`s fixed-line operator, TDM and its mobile phone subsidiary, mCel.
"Concluding the interconnection agreement was the main outstanding issue since Vodacom was awarded the licence to operate Mozambique`s second cellular network," says Andrew Mthembu, Vodacom`s deputy chief executive.
The lengthy negotiation process fuelled industry scepticism that Vodacom was ever going to take up the licence, but Mthobi Tyamzashe, Vodacom`s group executive of corporate affairs, explains that the delay was because the separation of TDM and mCel had to be effected.
"If you envisage the relationship that Vodacom has with Telkom, you can see that it would be possible for us to hide costs in our transactions with each other. The whole issue of separation was therefore critical, and without resolving it, we would not have been able to give proper meaning to what we want to do in Mozambique."
He adds: "Time was taken for practical reasons, and not as an indication of any reluctance on our part."
Vodacom has since instructed its supplier, Siemens Telecommunications, to go ahead with the roll-out of the network in Mozambique, expecting to be operational within eight months. Vodacom is targeting a 40% market share after two years in operation, and expects to grow to two million mostly prepaid customers over the next 10 years.
The company has projected a maximum capital investment of $260 million, which will create 1 400 direct and indirect jobs, and boost the neighbouring country`s economy. Trading as Vodacom Mocambique, the operation will be majority-owned by Vodacom, with local partner Emotel holding a minority stake.
Mozambique is SA`s biggest trading partner in the southern African region, and with local companies investing more than R25 billion in Mozambique over the past few years, Vodacom believes its expansion will position it to take advantage of this growing economy.
"Trade between SA and Mozambique is expected to improve and we wanted to be in the right place at the right time," says Tyamzashe.
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