Vodacom

Vodacom Group Limited (operating as Vodacom) is a South African mobile communications company, providing voice, messaging, data and converged services to over 55 million customers. 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.[1]

Vodacom Group Limited

Type	Public
Traded as	JSE: VOD ADR: VDMCY
ISIN	ZAG000106063 US92858D2009
Industry	Telecommunications
Founded	1994
Founders	Alan Knott-Craig (Senior)
Headquarters	Midrand
Area served	Africa
Key people	Shameel Joosub (CEO) Till Streichert (CFO) Dejan Kastelic (CTO) Phillip Moleketi (Chairman)
Products	Mobile telephony Internet services
Revenue	R86.370 billion (US$6.48 billion, 2018) R81.278 billion (US$6.1 billion, 2017)[1]
Operating income	R22.093 billion (US$1.66 billion, 2018) R19.228 billion (US$1.44 billion, 2017)[1]
Net income	R24.252 billion (US$1.82 billion, 2018) R21.750 billion (US$1.63 billion, 2017)[1]
Total assets	R96.543 billion (US$7.24 billion, 2018) R52.127 billion (US$3.91 billion, 2017)[1]
Total equity	R131.365 billion (US$9.85 billion, 2018) R81.138 billion (US$6.09 billion, 2017)[1]
Number of employees	7,554 (2018)[2]
Parent	Vodafone
Website	www.vodacom.com www.vodacom.co.za

It was owned in a 50/50 partnership by the South African telecommunications giant Telkom and British multinational operator Vodafone.[3][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).[5][1] On April 1 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 an estimated market share of 58% and more than 103 million customers across Africa.[7]

Technology

Vodacom 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.[8] On 21 October 2015, Vodacom launched its fibre product to the home user.[9] On 7 April 2017, Vodacom's 4G+ network in Brooklyn Mall, Pretoria achieved 240 Mbit/s in a speed test.[10]

Sports sponsorship

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

JSE listing

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.[11]

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.[12][13][14]

"Please Call Me"

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 ($5.25 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.[15]

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.[16] 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.[15]

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.”[17]

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.[18]

Neotel attempted takeover

In October 2013, Vodacom announced it would be acquiring Neotel in a potential US$590 million deal.[19] 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.[20][21]

Member companies

As at March 2014, 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	41,635,000	[1]
Vodacom Tanzania Ltd	61.6	Tanzania	537	12,899,000	[1]
Vodacom Congo (RDC) s.p.r.l.	51	DRC	578	11,821,000	[1]
VM, SA	85	Mozambique	530	6,108,000	[1]
Vodacom Lesotho (Pty) Ltd	80	Lesotho	209	1,366,000	[1]
Vodacom Business Africa (Nigeria) Ltd	100	Nigeria	Unavailable	Unavailable	[22]
Safaricom	34.94	Kenya	6,477	33,100,000	[22]

Ownership

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 March 2018:[1]

Vodacom Group stock ownership

Name of owner	Shareholding (%)
Vodafone Investments SA (Pty) Ltd	64.5
Government Employees Pension Fund (GEPF), wholly owned by South African Government	11.7
Wheatfield Investments 276 (Pty) Ltd	0.9
Institutional investors	17.8
Retail positions	1.4
Others	3.7
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).[1]

Smartphone launches

Vodacom launched iPhone 7 in South Africa on 14 October 2016.[23][24] It launched the iPhone Xs and Xs Max on 28 September 2018 starting at R21,999 ($1,650).[25]

The Samsung Galaxy S8 was officially launched on 5 May 2017.[26]

In 2017, TechCrunch reported that Vodacom partnered with GameMine in a $20 million deal to install subscription-based mobile games on Vodacom's smartphones.[27]

See also

• Vodacom Data Prices
• Telephone numbers in Africa
• Telephone numbers in South Africa
• MTN (South Africa)
• Cell C
• Telkom Mobile
• Leapeetswe Rapula Radiala Molotsane, Board member since 2005

References

1. "Vodacom Consolidated Financial Report 2018" (PDF). 31 March 2018. Retrieved 24 October 2018.
2. "Vodacom Integrated Report 2018" (PDF). 31 March 2018. Retrieved 24 October 2018.
3. Introduction Page on Vodacoms Website. http://www.vodacom.com/vodacom/about_vodacom/introduction.jsp%5B%5D
4. Vodacom Business article by the BBC. http://news.bbc.co.uk/2/hi/business/4434862.stm
5. Vodacom article by The Wall Street Journal http://online.wsj.com/article/SB122596655256404705.html?mod=googlenews_wsj
6. "Vodacom goes red, restructures its business - TechCentral". TechCentral. 2011-04-01. Retrieved 2017-08-31.
7. "Vodacom adds 4.5 million more customers". IOL. 2018-05-14. Retrieved 2018-08-08.
8. "Vodacom Integrated report 2015" (PDF). Vodacom Group. Archived from the original (PDF) on 2015-08-14. Retrieved 2016-04-05.
9. "Fibre to the Home launches". Vodacom now. 21 October 2015.
10. "Vodacom clocks 240Mbs on 4G+ network". itweb.co.za. 7 April 2017.
11. "Interdict to stop listing was fair". Retrieved 2018-06-01.
12. Knott-Craig denies any wrongdoing at Vodacom M&G
13. Knott-Craig hits out at claims Archived 2010-01-22 at the Wayback Machine News24
14. 2nd is Nothing - Creating a Multi-Bilion Rand Cellular Industry by Alan Knott-Craig with Eunice Afonso - 2009 Business Day
15. "Makate v Vodacom (Pty) Limited (08/20980) [2014] ZAGPJHC 135 (1 July 2014)". www.saflii.org. 2014-07-01. Retrieved 2016-04-28.
16. Knott-Craig, Alan; Afonso, Eunice (2009). Second is nothing: creating a multi-billion rand cellular industry. Johannesburg: Pan Macmillan.
17. "How Nkosana Makate won the Please Call Me case". moneyweb.co.za. 2016-04-28. Retrieved 2016-04-28.
18. "AN OPEN LETTER TO NKOSANA MAKATE ON HIS VICTORY AGAINST VODACOM 28/4/2016". facebook.com. 2016-04-28. Retrieved 2016-04-28.
19. South Africa's Vodacom looks to boost data with Neotel purchase, International: Reuters, 2013
20. "Vodacom abandons bid to buy Neotel". Retrieved 2016-08-16.
21. "Vodacom, Neotel merger deal collapses". Retrieved 2016-08-16.
22. "Vodacom Group 2014 Annual Report" (PDF). Vodacom Group. March 31, 2014. Archived from the original (PDF) on December 31, 2014. Retrieved December 31, 2014.
23. Writer, Staff. "Apple iPhone 7 registrations on Vodacom". Mybroadband. Mybroadband.com. Retrieved 6 October 2016.
24. Venktess, Kyle. "iPhone 7 and 7 Plus available for pre-order now". Fin24. Fin24.com. Retrieved 7 October 2016.
25. "Apple iPhone Xs – Vodacom contract prices". MyBroadband. 28 September 2018. Retrieved 25 October 2018.
26. "Samsung Galaxy S8 – Launch Date and Price for South Africa". My Broadband. 29 March 2017.
27. "Game publisher GameMine inks a $20 million partnership with South Africa's Vodacom". TechCrunch. Retrieved 13 January 2018.

External links

• Corporate Website