Vodacom Business could account for 25% of Vodacom South Africa’s service revenue, according to new plans revealed by Vuyani Jarana, chief officer of Vodacom Business.
Vodacom Business, which was created in 2008 to provide enterprise connectivity and communications services, currently generates R8 billion in revenue. This represents 16% of Vodacom South Africa’s current service revenue base.
“Cracking the enterprise model hasn’t been easy. Our original plan was to grow Vodacom Business through acquisition, but the right opportunities didn’t come up,” Jarana said.
“We went back to the drawing board and looked at what technical assets and what people skills we needed, and have spent the last few years building an entirely new platform.”
Pursuing a build rather than buy strategy, Vodacom Business says it has invested over R2 billion in the last five years. The group says that, due to its extensive network, over 90% of Vodacom Business’ customers are directly connected via Vodacom’s own fibre.
Based on these investments, as well as significant submarine cable capacity, Vodacom Business is able to provide a 99.995% network uptime guarantee to customers, it said.
Speaking about the new growth target, Jarana said that Vodacom Business is focusing on opportunities in SMEs, M2M (machine to machine) applications, and hosted and cloud services.
He said that, initially, the group targeted the top 1,500 enterprises in the major business metropoles, however he believes that the group now has the capacity to go after SMEs.
“We historically focused on corporate clients and didn’t have the scale or products to tackle the huge and rapidly growing SME segment. A side-effect of Vodacom’s consumer business providing high speed, high capacity links to base stations is that we’ve been able to piggy-back off this expanded reach and can now offer enterprise solutions to smaller businesses as well,” he said.
M2M is another major growth area, Vodacom said. Earlier this year, the group launched a global data service platform (GDSP) for its M2M communications business. This platform allows SIM-enabled devices to be controlled remotely from anywhere in the world.
Anticipating the move by large and small businesses alike to use hosted and cloud solutions, Vodacom Business said it manages four data centres across South Africa covering in total over 4,000m² of floor space.
The company is also in the process of building a fifth data centre at its offices in Midrand and has hosting facilities across Africa to service multinational customers.
“Vodafone has over 32 million mobile enterprise customers worldwide, and this segment makes up 27% of Vodafone Group’s service revenue.”
“With this kind of experience to draw on coupled with our strong network backbone and ability to tap into growth opportunities in things like SMEs and M2M, we think reaching our target of 25% of Vodacom South Africa’s service revenue within five years is a realistic goal,” Jarana said.
The business lead said that Vodacom currently has 2,500 business clients, which he hopes to ramp up by 10% annually.