LIVE FROM GSMA MOBILE 360 AFRICA, TANZANIA: The managing director of Vodacom Tanzania believes operators need to stop being their “own worst enemy,” instead turning to a partnership model with a focus on 4G technology to ensure Africa becomes a truly connected society.
In his keynote appearance this morning, Ian Ferrao quipped that “here in Tanzania operators take the Olympic gold medal for destroying things with price wars,” referencing the fierce competition between the country’s three largest operators.
According to GSMA Intelligence, Vodacom has 31 per cent market share, with Airtel (28 per cent) and Millicom’s Tigo (27 per cent) just behind.
Ferrao also pointed to an initiative announced this morning that will see the three operators launch the first active infrastructure sharing initiative in East Africa, with six 3G pilot sites planned to test “the sustainable provision” of mobile broadband services to 13 million underserved people across rural areas.
“We need to bring down the cost of investment,” he commented. “Rather than Vodacom paying $1 billion to improve network coverage we can work together and get that down to $250 million.”
Vodacom has shared its networks on a passive basis (towers and sites) for many years, but a move to ‘active’ network sharing (for example an operator’s core network) is a new strategy.
And in the drive to improve coverage in Africa’s rural areas, Ferrao said that it’s even more important to get the urban business model right first. “If you don’t have sufficient urban profitability then rural profitability won’t work – we need to ensure urban areas are profitable… We all need to work together, with vendors, and influence government policy across the board…. we need to really agree on challenges and key action plans across all stakeholders.”
Vodacom Tanzania has already deployed the latest mobile network technology 4G, offering theoretical speeds upwards of 60Mb/s. And Ferrao is on a mission to continue this progress, with a particular emphasis on rural deployments: “4G isn’t just a technology, it’s the enabler. We can create a connected society, business and governments. We have to do a lot more to accelerate this and ensure our 4G networks rollout.”
“It’s the primary tech for rural technology – the efficiency from a capacity and coverage point of view means it is the technology to use, we just need to sort out the devices.”
Geniuses or raving lunatics
To that end, the Vodacom chief is keeping a close eye on efforts to drive down the prices of smartphones. “There’s a $4 smartphone shipping in India – we’re trying to work out if they are geniuses or raving lunatics.”
Ferrao also criticised regulators for the high levels of taxation imposed on the mobile sector. “We need taxation relief. Today in Tanzania we have the second highest tax rates on telecoms services in Africa. That has to change. The amount of tax [parent] Vodafone paid last year outstrips all the investment we put in. That’s the wrong way round. We support looking for a more simpler and stabler environment.”
And he believes Africa’s mobile industry needs to catch up with more developed markets around the world. “In three years it would be great to see drones, robots, 3D printing and cloud based services as the next wave across the African continent – that’s where we need to be.”