Vodacom set to increase investment in Africa

VODACOM Group Ltd has revealed plans to increase its investments in Africa, following positive revenue turnover recorded this year.

Vodacom, which announced an 11 percent increase in first-half earnings on Monday after a strong performance in its home market, says it is putting aside about $10 billion from the sale of its Verizon Wireless stake in the US to upgrade its network units which includes its South African operation, as part of an investment plan known as Project Spring.

“We put together a program about how we want to accelerate our investment in South Africa and the opportunity presented by Project Spring makes it easier for us,” Chief Executive Shameel Aziz Joosub said, adding that Vodacom has been investing R7billion ($677 million) yearly in its South Africa business, in which it owns 65 percent.

Vodacom plans to increase its investment in South Africa by raising capital spending to 17 percent of revenue, from 13 percent expended in 2013.

The additional investment will help improve fibre access to homes and businesses and enable a faster roll out of 4G networks, Joosub said.

“A cornerstone of our strategy is sustained investment in network capacity….With increased capacity, we’re able to offer better value and support higher usage without impacting quality,” continued the Chief Executive.

“In South Africa, we invested ZAR3.1 billion (US$299.9 million) in the network during the period (for the six months to the end of September) and increased 3G coverage to 88.9 per cent of the population.”

Aside South Africa, Vodacom has operations in Lesotho, Tanzania, Democratic Republic of Congo and Mozambique. However, it wants to cement its South African dominance by purchasing Internet provider Neotel Pty Ltd and focus more on small-to medium-size business customers.

A statement released by the company confirmed that it recorded a 41.2 per cent increase in its Smartphone and hardware sales for the six months to the end of September, resulting in increased sales of data bundles by 108.4 per cent.

Data revenue from Vodacom’s international operations more than doubled to 985 million rand ($94.3 million), while its total mobile data revenue rose 29 percent to R6.1 billion ($583 million).

The number of its active customers also rose by 9.7 percent to 53.8 million as the company added 949,000 subscribers in South Africa and 2.3 million internationally.