Vodacom Case Study

VODACOM CASE STUDY
Vodacom, South Africa’s largest mobile operator, is
using Geneva to support all of its new service
offerings to both pre- and post-paid customers.
These new services include GPRS-, SMS- as well as
content-based services.
South Africa, the prize for the top emerging brand
in the Sunday Times Brands of the Year awards in
both 1999 and 2000 and the Professional
Management Review (PMR) Golden Arrow award
for the Best Cellular Network.
IT STRATEGY AS A ROUTE TO
INCREASED ARPU
Vodacom is more optimistic than its competitors
about growth prospects in the mobile market. It is
predicting 19 million users by 2007, compared with
around 10 million now, and it plans to target this
new market aggressively. Its aim is not merely to
increase the size of its subscriber base but also to
increase ARPU by offering customers a range of
innovative new services. This strategy requires a
modern flexible billing platform.
COMPANY BACKGROUND
Vodacom, which has its headquarters in Midrand,
has over 7 million subscribers and is the largest of
the three mobile operators in South Africa, with
about 60% of the market. It currently handles 30%
of the country’s telephony traffic and 10% of the
entire African continent’s. It has more than 4000
base stations and covers about 64% of the total land
surface of South Africa.
In terms of licence conditions negotiated between
Vodacom and South Africa's regulatory authorities,
Vodacom undertook to roll-out 22,000 public access
GSM telephones in South Africa's under-serviced
areas. These are not standard mobile telephones but
they resemble fixed line telephones and are installed
in shipping containers, shops and other areas
frequented by the public. Although initially a licence
obligation, Vodacom continues to roll-out Vodacom
Community Services telephones with enthusiasm as
these public phones have made a tremendous
difference to the lives of ordinary South Africans.
Vodacom’s shareholders are Telkom SA (which owns
50% of the company), Vodafone, Venfin and HCI.
Vodacom has won a number of prestigious awards.
These include induction as a Gold Member of the
GSM Association for the role played in making
mobile communications widely available across
CONVERGENT PRE-PAY
Since the ratio of prepaid to postpaid subscribers is
currently around 6:1, ARPU will only be significantly
increased if prepaid customers have the same access
to new services as postpaid customers. Traditional
network-based prepaid solutions were not designed to
deliver advanced data and content services, especially
when these are priced using complex tariffs and
discounts. Integration between the Intelligent
Network and the rating platform is necessary in
order to deliver a solution that allows prepaid and
postpaid customers to enjoy the same level of tariffs,
discounts and marketing offers. Vodacom has been
pioneering the introduction of an IT solution that
supports this vision of Convergent Pre-Pay.
CONTENT SERVICES
The concept of content services is still very much in
its infancy, although operators in many different
countries are offering services such as ring tones
and screen savers, as well as location-based services
like information about local tourist attractions. The
potential range of services is huge and no one yet
knows how this market will develop or what in the
future will catch the mood of mobile phone users.
Vodacom’s strategy is therefore to make its network
available to a wide range of content providers who
will have the freedom to develop new services,
ranging from the practical to the fashionable, in
return for a share of their revenue. As part of the
deal, Vodacom will also handle revenue collection
and distribution on behalf of the third parties
involved. To implement this strategy requires a
billing platform that supports functionality to handle
merchant settlement.