Vodacom, the newest mobile operator in the war-torn Democratic Republic of Congo (DRC), reckons it can generate three times more sales per subscriber than in its flagship South African operation.
”We anticipate that because of the lack of telecoms in this country, our average revenue per user will be $25-30 a month on pre-paid. This compares to $8-9 delivered in South Africa,” said Andrew Mthembu, head of the international arm of Vodacom — Africa’s biggest operator.
Mthembu, speaking on a weekend trip to Kinshasa to launch Vodacom Congo, expects the operation in which $94 million has been invested to show an operating profit by next March.
South Africa’s biggest operator owns 51% of Vodacom Congo. The rest is held by US-backed Congolese Wireless Network, which had only managed to sign up 12 000 users since it won the national licence in 1999.
South Africa has the strongest economy on the world’s poorest continent. Congo is in tatters after years of neglect under the former dictator Mobutu Sese Seko and then civil war.
”Whatever GDP per capita figures have been published are far from the truth,” Mthembu said, adding that despite the country’s poverty, enough Congolese could afford Vodacom’s $15 upfront connection fee and $0,24 a minute call rate.
To counter a maturing market at home, Vodacom is in a race with South Africa’s number two network, M-Cell’s MTN, to stake claims to users in other parts of Africa, the world’s fastest growing telecoms market.
Vodacom is the jewel in the crown of South Africa’s Telkom. The government plans to list the utility, which owns half of Vodacom, by March in South Africa’s biggest privatisation yet.
Potential investors in Telkom are keen to watch Vodacom’s adventures beyond South Africa, where it has seven million users. It also has operations in Tanzania and Lesotho.
Rival MTN’s around four million users are in South Africa, Cameroon, Nigeria, Uganda, Rwanda and Swaziland.
Mthembu said Vodacom’s 250 000 users in Tanzania were growing at around 15 000 a month. The operation, which has been going for nearly two years, turned a profit within 10 months.
He said the key was to offer the widest coverage.
But in the vast former Zaire, things are different. There Vodacom has only 88 base stations versus 5 000 in South Africa.
It operates in three parts of Africa’s third biggest country — the capital Kinshasa and mining towns Mbuji-Mayi and Lubumbashi.
For the first time, the three far-flung areas are connected. Vodacom is using satellite to deliver mobile communications — a move which prompted competitor Celtel to do the same.
And after three weeks of operating, Vodacom has signed up 52 000 customers, compared with about 160 000 on Celtel.
But Vodacom reckons the potential market is six million people out of a population of 60-million, and it aims to control half that within 10 years.
It might not need to venture beyond its three initial areas to achieve that. And it might not even want to as other populated areas of the country remain in the control of various forces backed by neighbouring states.
”We chose the three cities because there is peace there currently. We will at all times take cues from the government on where peace is opening up,” Mthembu said when asked about Vodacom’s Congo expansion plans.
Despite the failure of talks last month to end the war, Mthembu was confident Vodacom would do well. ”We are significant steps closer to a deal here than when I sold this investment to my shareholders,” he said.
Apart from Telkom, Vodacom’s other owners are UK operator Vodafone, with 31,5% and South African groups VenFin and Hosken Consolidated Investments with 13,5 and five percent respectively. – Reuters