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Vodacom

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Vodacom Group Limited
Company typePublic subsidiary
JSE: VOD
ISIN
IndustryTelecommunications
Founded1994; 30 years ago (1994)
FoundersTelkom South Africa: Alan Knott-Craig (Senior)
Headquarters
Midrand, South Africa
Area served
Africa
Key people
Shameel Joosub (CEO)
Till Streichert (CFO)
Dejan Kastelic (CTO)
Phillip Moleketi (chairman)
ProductsMobile telephony
Internet services
Revenue
  • IncreaseR98.302 billion (US$6.65 billion, 2021)
  • R90.746 billion (US$6.14 billion, 2020)[1]
  • IncreaseR22.093 billion (US$1.49 billion, 2018)
  • R19.228 billion (US$1.3 billion, 2017)[2]
  • IncreaseR24.252 billion (US$1.64 billion, 2018)
  • R21.750 billion (US$1.47 billion, 2017)[2]
Total assets
  • IncreaseR96.543 billion (US$6.53 billion, 2018)
  • R52.127 billion (US$3.53 billion, 2017)[2]
Total equity
  • IncreaseR131.365 billion (US$8.89 billion, 2018)
  • R81.138 billion (US$5.49 billion, 2017)[2]
Number of employees
7,554 (2018)[3]
ParentVodafone Group plc (65.1%)
Websitevodacom.com

Vodacom Group Limited is a South African mobile communications company, providing voice, messaging, data and converged services to over 130 million customers across Africa. From its roots in South Africa, Vodacom has grown its operations to include networks in Tanzania, the Democratic Republic of the Congo, Mozambique, and Lesotho, and provides business services to customers in over 32 African countries, including Nigeria, Zambia, Angola, Kenya, Ghana, Côte d'Ivoire, and Cameroon.[2][1]

History

[edit]

It was owned in a 50/50 partnership by the South African telecommunications giant Telkom and British multinational operator Vodafone.[4] On 6 November 2008, Vodafone announced that it had agreed to increase its stake to 64.5%, and Telkom said that it would spin off its remaining holding by listing it on the Johannesburg Stock Exchange (JSE).[2][5] On 1 April 2011, Vodacom officially unveiled its new change in branding from blue to red, using the same style as its parent company, Vodafone.[6]

Vodacom provides coverage to Mount Kilimanjaro, which was the highest point in the world to be covered by GSM, until Axiata (through its subsidiary Ncell) provided coverage at the top of Mount Everest, the highest point in the world. Vodacom was aided by its optimistic advertisements at the early stages of the democratic South Africa, including the yebo gogo campaign which is still in effect today in Africa. Vodacom is the leading cellular network in South Africa with a market share of over 40% and more than 45 million users.[7] The company has an estimated market share of 58% and more than 103 million customers across Africa.[8]

Technology

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Vodacom South Africa provides 3G, 4G, and UMTS networks in South Africa, and also offers HSPA+ (21.1 Mbit/s), HSUPA (42 Mbit/s, 2100 MHz), Wi-Fi, WiMAX, and LTE services. Vodacom was the first cellular provider to introduce LTE in South Africa.[9] On 21 October 2015, Vodacom launched its fibre product to the home user.[10] On 7 April 2017, Vodacom's 4G+ network in Brooklyn Mall, Pretoria achieved 240 Mbit/s in a speed test.[11] In early 2020 Vodacom also became the second network operator in Africa to launch a live 5G network, initially available in Johannesburg, Pretoria and Cape Town.[12]

Sports sponsorships

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Vodacom is a sponsor of many South African sports.

In provincial rugby union, they are the sponsors of the Pretoria-based Vodacom Blue Bulls and own the naming rights to the union's home stadium, Loftus Versfeld.

As part of their rugby union sponsorship portfolio, Vodacom has been the title sponsor of the Super Rugby tournament in South Africa since 1996.

In football, they sponsor two clubs in the Premier Soccer League: the Kaizer Chiefs and Orlando Pirates. They also sponsor the South African Football Association and the national teams Bafana Bafana (men), Amajita (under 20s), and previously Banyana Banyana (women). However, competitor MTN was one of the sponsors of the 2010 FIFA World Cup held in South Africa.

Past sponsorships include the national rugby union team, the Springboks, from 1994 to 2017, and the South African Shelby Can-Am series between 2000 and 2005.

Controversies

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JSE listing

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On May 17, 2009, a court dismissed a joint Congress of South African Trade Unions (COSATU) and ICASA application to stop Vodacom's JSE listing. Chegoane Mabelane, the South African article writer and prominent supporter of both African National Congress (ANC) and its alliance; in one of his articles stated that the interdict to stop the listing was fair.[13]

In January 2010, the Sunday Times alleged that Alan Knott-Craig (Senior), former Vodacom CEO, helped his son, Alan Knott-Craig with business ventures using Vodacom's resources. He also allegedly awarded a multimillion-rand contract to a marketing and advertising company run by his family members.[14][15][16]

"Please Call Me"

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In 2008, former employee Nkosana Makate took Vodacom to court, claiming that the profitable "Please Call Me" message service was originally his invention and demanding compensation. Eight years later, Makate eventually won his case in the Constitutional Court. Makate then entered negotiations with Vodacom for a 15% cut of the R70 billion ($4.74 billion) he claims "Please Call Me" has earned for Vodacom since its inception.

A 2014 judgement in the South Gauteng High Court supported Makate's claim to having originated "Please Call Me." The court heard that, in November 2000, Makate had shared his idea (initially termed the "buzz" idea) with Philip Geissler, then board member and director of product development and management at Vodacom. Geissler had agreed to give Makate a cut should the "Please Call Me" innovation prove a success (however, there was no such agreement, written, oral, or implied – and no evidence to support it). Makate's witnesses presented emails sent by Geissler (Geissler was never called to testify by either party, raising suspicion that both parties would not have benefited from what Geissler would say under oath) and an article in Vodacom's "Talk Time" internal newsletter (such newsletter was written, edited, and printed by a third party in Cape Town) which acknowledged and praised Makate for his idea and his contribution to the product.[17]

The court also rejected former CEO Alan Knott-Craig's claim that he had come up with the idea. Knott-Craig had published the claim in his autobiography, and later repeated in court, that he had the idea while watching two security guards trying to communicate on phones without airtime.[18] Yet the High Court found against Makate's claim for compensation, holding Vodacom's argument that Geissler had not had the authority to promise Makate such compensation and that the debt would have expired (in legal terms, been prescribed) within three years.[17]

Makate took the case on appeal, and then took it to the Constitutional Court. In April 2016, Justice Chris Jafta found in Makate's favour and against Vodacom, overturning both judgements by the High Court, finding that Geissler had the authority to promise compensation, and that Makate's case was not based on an unpaid debt. In Jafta's words: “In not compensating the applicant [Makate] [….] Vodacom associated itself with the dishonourable conduct of its former CEO, Mr Knott-Craig and his colleague, Mr Geissler, and this leaves a sour taste in the mouth. It is not the kind of conduct to be expected from an ethical corporate entity.”[19]

In an open letter to Makate on Facebook, civic society non-profit Right2Know congratulated Makate. Right2Know used the letter to draw attention to the hypocrisy of multinational corporations which claim to support young black South African innovators such as Makate, but whose anti-competitive practices often strangle meaningful innovation. The letter also drew attention to the fact that South Africa's telecommunications duopoly (Vodacom–MTN) had led to the kind of unaffordable tariffs which made the "Please Call Me" service so successful with impoverished consumers in the first place.[20]

Neotel attempted takeover

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In October 2013, Vodacom announced it would be acquiring Neotel in a potential US$590 million deal.[21] Even though regulatory approval by the Independent Communications Authority of South Africa (ICASA) was obtained in 2015, the deal ultimately collapsed in March 2016 after competitors successfully challenged the transfer of Neotel's licenses and spectrum to Vodacom in court.[22][23]

Member companies

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As at March 2023, the companies that comprised the Vodacom Group include, but are not limited to the following:

Vodacom Group member companies
Name of member company Vodacom Group's

ownership (%)

Country No. of

employees

No. of

customers

Ref
Vodacom (Pty) Ltd 100 South Africa 5,007 44,200,000 [2]
Vodacom Tanzania Ltd 75 Tanzania 537 16,700,000 [2]
Vodacom Congo (RDC) s.p.r.l. 51 DRC 578 21,000,000 [2]
VM, SA 85 Mozambique 530 10,700,000 [2]
Vodacom Lesotho (Pty) Ltd 80 Lesotho 209 1,700,000 [2]
Vodafone Egypt Telecommunications S.A.E. 55 Egypt Unavailable 45,500,000
Safaricom 34.94 Kenya 6,477 43,900,000 [24]
Safaricom Telecommunications Ethiopia 6.20 Ethiopia Unavailable 2,100,000 [25]

Ownership

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The shares of Vodacom Group are listed and traded on the JSE, under the ticker symbol: VOD. The shareholding in the group's stock was as depicted in the table below in May 2022.[26]

Vodacom Group stock ownership
Name of owner Shareholding (%)
Vodafone Investments SA (Pty) Ltd 65.1
Government Employees Pension Fund (GEPF),

wholly owned by South African Government

13.54
YeboYethu Investment Company (Pty) Ltd 6.23
Wheatfield Investments 276 (Pty) Ltd 0.84
Institutional investors 15.76
Retail positions 2.96
Others 0.17
Total 100.00

Institutional investors include, in order of held stock, the Public Investment Corporation (also known as PIC, wholly owned by the South African Government), Lazard (US), Blackrock (US), The Vanguard Group (US), Government of Singapore Investment Corporation (also known as GIC, Singapore), Old Mutual (ZA), Abax (ZA), Sanlam (ZA), and State Street Global Advisors (US).[2]

Smartphone launches

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Vodacom launched iPhone 7 in South Africa on 14 October 2016.[27][28] It launched the iPhone Xs and Xs Max on 28 September 2018 starting at R21,999 ($1,650) on a 24 month contract.[29]

The Samsung Galaxy S8 was officially launched on 5 May 2017.[30]

In 2017, TechCrunch reported that Vodacom partnered with GameMine in a $20 million deal to install subscription-based mobile games on Vodacom's smartphones.[31]

See also

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References

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  1. ^ a b "News releases | Vodacom Group". www.vodacom.com. Retrieved 2021-09-15.
  2. ^ a b c d e f g h i j k l "Vodacom Consolidated Financial Report 2018" (PDF). 31 March 2018. Archived (PDF) from the original on 25 October 2018. Retrieved 24 October 2018.
  3. ^ "Vodacom Integrated Report 2018" (PDF). 31 March 2018. Archived (PDF) from the original on 25 October 2018. Retrieved 24 October 2018.
  4. ^ "Telkom boosted by Vodacom figures". 14 November 2005. Archived from the original on 2018-07-19. Retrieved 2020-09-01.
  5. ^ Stewart, Robb M. (2008-11-07). "Vodafone Seeks Majority Control of Vodacom". The Wall Street Journal. ISSN 0099-9660. Archived from the original on 2018-11-20. Retrieved 2020-09-01.
  6. ^ "Vodacom goes red, restructures its business - TechCentral". TechCentral. 2011-04-01. Archived from the original on 2017-08-31. Retrieved 2017-08-31.
  7. ^ "Vodacom vs MTN vs Telkom vs Cell C — biggest mobile network battle". MyBroadband. 8 January 2023. Retrieved 8 January 2023.
  8. ^ "Vodacom adds 4.5 million more customers". IOL. 2018-05-14. Archived from the original on 2018-08-08. Retrieved 2018-08-08.
  9. ^ "Vodacom Integrated report 2015" (PDF). Vodacom Group. Archived from the original (PDF) on 2015-08-14. Retrieved 2016-04-05.
  10. ^ "Fibre to the Home launches". Vodacom now. 21 October 2015. Archived from the original on 13 April 2017.
  11. ^ "Vodacom clocks 240Mbs on 4G+ network". itweb.co.za. 7 April 2017. Archived from the original on 13 April 2017.
  12. ^ "Vodacom launches 5G in three South African cities". RCR Wireless News. 2020-05-05. Retrieved 2020-12-24.
  13. ^ "Interdict to stop listing was fair". Archived from the original on 2017-04-12. Retrieved 2018-06-01.
  14. ^ Knott-Craig denies any wrongdoing at Vodacom Archived 2010-01-21 at the Wayback Machine M&G
  15. ^ Knott-Craig hits out at claims Archived 2010-01-22 at the Wayback Machine News24
  16. ^ 2nd is Nothing - Creating a Multi-Bilion Rand Cellular Industry by Alan Knott-Craig with Eunice Afonso - 2009 Archived 2012-03-20 at the Wayback Machine Business Day
  17. ^ a b "Makate v Vodacom (Pty) Limited (08/20980) [2014] ZAGPJHC 135 (1 July 2014)". www.saflii.org. 2014-07-01. Archived from the original on 2015-09-02. Retrieved 2016-04-28.
  18. ^ Knott-Craig, Alan; Afonso, Eunice (2009). Second is nothing: creating a multi-billion rand cellular industry. Johannesburg: Pan Macmillan.
  19. ^ "How Nkosana Makate won the Please Call Me case". moneyweb.co.za. 2016-04-28. Archived from the original on 2016-04-28. Retrieved 2016-04-28.
  20. ^ "AN OPEN LETTER TO NKOSANA MAKATE ON HIS VICTORY AGAINST VODACOM 28/4/2016". facebook.com. 2016-04-28. Archived from the original on 2016-03-26. Retrieved 2016-04-28.
  21. ^ South Africa's Vodacom looks to boost data with Neotel purchase, International: Reuters, 2013, archived from the original on 2015-09-24, retrieved 2017-07-03
  22. ^ "Vodacom abandons bid to buy Neotel". Archived from the original on 2016-08-27. Retrieved 2016-08-16.
  23. ^ "Vodacom, Neotel merger deal collapses". Archived from the original on 2016-08-22. Retrieved 2016-08-16.
  24. ^ "Vodacom Group 2014 Annual Report" (PDF). Vodacom Group. March 31, 2014. Archived from the original (PDF) on December 31, 2014. Retrieved December 31, 2014.
  25. ^ Muiruri, Kepha (25 May 2021). "Safaricom to commence operations in Ethiopia next year". Citizen Digital. Citizen TV. Retrieved 25 May 2021.
  26. ^ "Who Really Owns Vodacom". My Broadband. May 2022. Retrieved 6 October 2022.
  27. ^ Staff Writer. "Apple iPhone 7 registrations on Vodacom". Mybroadband. Mybroadband.com. Archived from the original on 7 October 2016. Retrieved 6 October 2016.
  28. ^ Venktess, Kyle. "iPhone 7 and 7 Plus available for pre-order now". Fin24. Fin24.com. Archived from the original on 8 October 2016. Retrieved 7 October 2016.
  29. ^ "Apple iPhone Xs – Vodacom contract prices". MyBroadband. 28 September 2018. Archived from the original on 26 October 2018. Retrieved 25 October 2018.
  30. ^ "Samsung Galaxy S8 – Launch Date and Price for South Africa". My Broadband. 29 March 2017. Archived from the original on 1 April 2017.
  31. ^ "Game publisher GameMine inks a $20 million partnership with South Africa's Vodacom". TechCrunch. 30 June 2017. Archived from the original on 14 January 2018. Retrieved 13 January 2018.
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