Vodacom

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Vodacom
Public
Traded as JSE: VOD
Industry Telecommunications
Founded 1994
Headquarters Johannesburg, South Africa
Area served
Africa
Key people
Shameel Joosub (CEO)
Peter Moyo (Chairman)
Products Mobile telephony
Internet services
Revenue Increase US$5.402 billion (2015)[1]
Increase US$1.27 billion (2015)[1]
Increase US$850 million (2015)[1]
Total assets Increase US$4.307 billion (2015)[1]
Total equity Increase US$2.643 billion (2015)[1]
Number of employees
7,786 (2015)[1]
Parent Vodafone
Website www.vodacom.co.za

Vodacom Group Limited (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 Congo, Mozambique, and Lesotho and provides business services to customers in over 40 African countries such as Nigeria, Zambia, Angola, Kenya, Ghana, Côte d'Ivoire, and Cameroon. It was owned on a 50:50 basis by the South African telecommunications group Telkom and the British mobile phone operator Vodafone.[2][3] On 6 November 2008 Vodafone announced that it had agreed to increase its stake to 65%, and Telkom said that it would spin off its remaining holding by listing it on the Johannesburg Stock Exchange.[4] 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.[5]

Vodacom provides coverage to Mount Kilimanjaro, which used to make it the highest point in the world to be covered by GSM. It no longer is, as TeliaSonera now provides 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, this includes the yebo gogo campaign which is still in effect today in South Africa. Vodacom is the leading cellular network in South Africa with an estimated market share of 58% and more than 23 million customers.

Technology[edit]

Vodacom provides 3G, 4G, and UMTS networks in South Africa, and also offers HSPA+ 21.1 Mbit/s, HSUPA (2100 MHz), 42 Mbit/s., Wi-Fi, WiMAX, and LTE services. Vodacom was the first cellular provider to introduce LTE in South Africa.[1] On 21 October 2015 Vodacom launched its Fibre to the Home service.[6] On 7 April 2017, Vodacom's 4G+ network in Brooklyn Mall, Pretoria achieved 240Mbs in a speed test.[7]

Sports sponsorship[edit]

Vodacom is a sponsor of South African sports. In provincial rugby union, they are the sponsors of the Pretoria-based Vodacom Blue Bulls. Vodacom was the primary sponsor of the South African Shelby Can-Am series between 2000 and 2005.

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

Vodacom also owns the naming rights to several stadia, among them Vodacom Park in Bloemfontein and Loftus Versfeld in Pretoria.

Takeover bid for Neotel[edit]

In October 2013, Vodacom announced it would be acquiring Neotel in a potential $590 million deal.[8] Even though regulatory approval by the Independent Communications Authority of South Africa 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.[9][10]

Controversies[edit]

On May 17, 2009, a court dismissed a joint 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 and its alliance; in one of his articles stated that the interdict to stop listing was fair.

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 resources. He also allegedly awarded a multi-million-rand contract to a marketing and advertising company run by family members.[11][12][13]

Please Call Me and the Constitutional Court[edit]

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 will now enter negotiations with Vodacom for a 15% cut of the R70 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 (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 3rd party in Cape Town) which acknowledged and praised Makate for his idea and his contribution to the product.[14]

The court also rejected former CEO Alan Knott-Craig (Senior)'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.[15] 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.[16]

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 and finding that Geissler had 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 (Given that Geissler was never called to testify in any of the trials related to this issue, how could any court make any claims as to any of his actions - specifically the Constitutional Court's unsubstantiated claim that he was associated with dishonourable conduct?) 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 NPO 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 telecoms 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]

Member Companies[edit]

As at March 2014, the companies that comprised the Vodacom Group include, but are not limited, to the following:[19]

Ownership[edit]

The shares of Vodacom Group are listed and traded on the JSE, under the symbol: VOD. The shareholding in the group's stock was as depicted in the table below:[19]

Vodacom Group Stock Ownership
Rank Name of Owner Percentage Ownership
1 Vodafone Investments SA (Pty) Limited 65.00
2 South African Government 13.91
3 Others 21.09
Total 100.00

Smartphone Launches[edit]

Vodacom launched iPhone 7 in South Africa on 14 October, 2016.[20][21] Vodacom has first provided the South African public with a pre-order offering before the device's official local launch.

The Samsung Galaxy S8 has been made available in South Africa via pre-order and was officially launched on 5 May 2017.[22]

See also[edit]

References[edit]

  1. ^ a b c d e f g "Vodacom Integrated report 2015" (PDF). Vodacom Group. Retrieved 2016-04-05. 
  2. ^ Introduction Page on Vodacoms Website. http://www.vodacom.com/vodacom/about_vodacom/introduction.jsp
  3. ^ Vodacom Business article by the BBC. http://news.bbc.co.uk/2/hi/business/4434862.stm
  4. ^ Vodacom article by the Wall Street Journal http://online.wsj.com/article/SB122596655256404705.html?mod=googlenews_wsj
  5. ^ "Vodacom goes red, restructures its business - TechCentral". TechCentral. 2011-04-01. Retrieved 2017-08-31. 
  6. ^ "Fibre to the Home launches". Vodacom now. 21 October 2015. 
  7. ^ "Vodacom clocks 240Mbs on 4G+ network". itweb.co.za. 7 April 2017. 
  8. ^ South Africa's Vodacom looks to boost data with Neotel purchase, International: Reuters, 2013 
  9. ^ "Vodacom abandons bid to buy Neotel". Retrieved 2016-08-16. 
  10. ^ "Vodacom, Neotel merger deal collapses". Retrieved 2016-08-16. 
  11. ^ Knott-Craig denies any wrongdoing at Vodacom M&G
  12. ^ Knott-Craig hits out at claims News24
  13. ^ 2nd is Nothing - Creating a Multi-Bilion Rand Cellular Industry by Alan Knott-Craig with Eunice Afonso - 2009 Business Day
  14. ^ "Makate v Vodacom (Pty) Limited (08/20980) [2014] ZAGPJHC 135 (1 July 2014)". www.saflii.org. 2014-07-01. Retrieved 2016-04-28. 
  15. ^ Knott-Craig, Alan; Afonso, Eunice (2009). Second is nothing: creating a multi-billion rand cellular industry. Johannesburg: Pan Macmillan. 
  16. ^ "Makate v Vodacom (Pty) Limited (08/20980) [2014] ZAGPJHC 135 (1 July 2014)". www.saflii.org. 2014-07-01. Retrieved 2016-04-28. 
  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. ^ a b "Vodacom Group 2014 Annual Report" (PDF). Vodacom Group. March 31, 2014. Retrieved December 31, 2014. 
  20. ^ Writer, Staff. "Apple iPhone 7 registrations on Vodacom". Mybroadband. Mybroadband.com. Retrieved 6 October 2016. 
  21. ^ Venktess, Kyle. "iPhone 7 and 7 Plus available for pre-order now". Fin24. Fin24.com. Retrieved 7 October 2016. 
  22. ^ "Samsung Galaxy S8 – Launch Date and Price for South Africa". My Broadband. 29 March 2017. 

External links[edit]