Vodacom is a South African company that was established in 2004 by the merger of two leading mobile communication service providers. Vodacom is the largest mobile telecommunication company in Africa and has about 36 million customers.Let us know more about that the Vodacom Swot Analysis & Competitors-Know More.
Vodacom Services:
Vodacom is a leading operator of GSM and CDMA technologies with an extensive range of services that include voice, data, and SMS services. Vodacom also provides access to internet services through its fiber Optic network with speeds up to 100Mbps.
Global Market:
It is the largest mobile communications provider in South Africa and serves more than 50 million users. Its customers can access a broad range of services, making it a primary network for Internet purposes as well as voice and data services.
Company Strengths:
1. Data Coverage/Accuracy:
The company has released state-of-the-art mobile technology to serve its subscribers. It is the first to reach 100% data coverage in urban areas of the country. Data coverage is also available for several other areas. The Company’s subscribers can access the internet through its service by using WAP, 3G, and other broadband technologies.
2. Mobile Network:
The Company has invested in establishing GPRS (General Packet Radio Service) and EDGE (Enhanced Data Rates for GSM Evolution) networks which are now taking off at a rapid pace to enable cordless browsing on the go.
3. New Services:
(a) Subscribers have access to a wide array of domestic and international content on its mobile network, including video-on-demand programs, news, weather reports, financial services, sports events, and music.
(b) The Company has also launched the mobile wallet service “PayGo”, which enables subscribers to pay bills by mobile phone. PayGo is an innovative solution that helps reduce the number of checks one needs to write to pay for goods or services using cash at the check-out counter.
4. Mobile Money:
Vodacom Kenya and Vodacom Tanzania have introduced mobile money services in their countries, following its successful roll-out in South Africa. The mobile money services allow subscribers to deposit and withdraw cash from their accounts using the airtime they have on their phones instead of using a debit card or paper money.
5. Smartphone:
The Company has released a new smartphone called “Vodacom 845,” and it has an integrated 3G modem offering high bandwidth and excellent data transmission rates. It has an improved keypad for typing with one hand and offers more space for the thumb to operate the keys, which makes it easier for people to text.
Weaknesses:
1. Customer Service:
The customer service of the company has been questioned, and some customers even say that it is one of the most unresponsive companies. On social media such as Twitter and Facebook, outages and network problems are reported daily.
2. Network Coverage:
The Company has not been able to expand the 3G network to rural areas in South Africa, where there is low economic growth due to inadequate infrastructure facilities including electricity supply, poor road conditions, flooding in rainy seasons, and drought in dry seasons. This has a severe financial impact on the economy.
3. Pricing:
The company’s pricing strategy is still unclear despite its claim of having affordable prices compared to competitors in South Africa. However, some customers say it is more expensive than they expected.
4. Lack of innovation:
The Company has not introduced any new technology or services that are unique within the telecommunications industry in South Africa, which is the only country where Vodacom is operating.
Opportunities:
1. Expansion:
The Company will be expanding its network to include the entire country in line with government policy that calls for high-speed Internet services to be available in every household by 2030. The company is also developing special services designed for the youth market in South Africa, which is a lucrative market.
2. Developing Countries:
Vodacom has established a partnership with Terna, a leading developer of diesel-electric power generation sets, for selling their power sets to emerging markets in Africa and Asia to provide an off-grid power source for Vodacom’s telecom networks. These markets have experienced poor infrastructure development because of a lack of investment from governments across Africa and have a high potential for future growth in data use and sales.
3. North America:
The Company is expanding into North America, which has a population of more than 1 billion people. One of the countries where Vodacom is focusing on is the U.S., where there are close to 2 billion mobile subscribers. This will be a highly profitable market as Vodacom continues to grow its presence in the U.S.
4. Africa:
In most African countries with high telecommunication penetration, the focus of most telecommunication service providers has been on urban areas and people with higher incomes with a limited reach to rural areas that have a low per capita telecommunications usage rate. However, Vodacom will be focusing on rural areas with low telecom penetration rates. This will produce high telecom revenues for the Company, which will translate to more jobs for the people who are employed by the Company.
5. China:
Vodacom is trying to establish a foothold in China to cater to its growing African diaspora population in the country. This plan is being executed through acquisitions of companies that have established themselves in China’s rapidly developing telecommunications market.
Threats:
1. Operations:
The Company experiences service outages mostly on its 3G network, where the service is available. Since the service is designed for high-speed data transmission, subscribers are unable to access the Internet when the network goes down.
2. New technology:
Vodacom’s competitors are introducing new technologies to stay ahead of the game. The new technologies include LTE (4G), HSDPA (3.75G), and HSPA+ (3.5G) that allow faster data transfer speeds for their customers than Vodacom’s 2G and 3G networks that offer lower speeds of Internet connectivity than its competitors’.
3. Foreign ownership:
Many telecom operators in Africa are owned by large foreign telecommunications companies. Vodacom is considered to be vulnerable to foreign takeovers because its South African parent company, Vodacom Group, is partly owned by Liberty Global, an international telecommunications group with holdings in the U.S., U.K., Germany, and Spain. This has raised concerns over the control of the country’s telecommunications industry by foreign investors.
4. The U.S.:
Vodacom has agreed to buy a stake in Verizon Wireless’ wireless subsidiary for $2 billion, which will give it access to Verizon’s 4G spectrum in the U.S. This will help Vodacom expand its customer base and enhance its wireless service coverage, which is expected to help it compete more effectively against competitors.
5. Inefficient allocation of resources:
Vodacom’s management has been accused of inefficient use of resources such as bandwidth by its competitors.
6. Network capacity:
Consumers’ complaints are suggesting to the service provider that it can improve its network capacity by connecting more cell towers to the existing network instead of using more bandwidth, which limits its transfer speed. The company has not yet responded to these suggestions, which are expected to contribute to further negative publicity effects on the Company’s image due to consumers’ growing dissatisfaction with its services in the future, especially in rural areas where the government has stated that high-speed Internet services should be available in every household by 2030.
Major Competitors:
1. MTN:
MTN is Vodacom’s biggest competitor. The two companies have roughly the same market share and compete in the same markets. They have intense competition, especially in metropolitan areas where their market shares are significantly similar. The companies each spend 550 million rands ($55 million) per year on advertising and brand promotion to woo customers from one another.
2. Cell C:
Cell C is also a major competitor of Vodacom in South Africa, accounting for about 5% of the country’s total mobile subscribers. It has more than 8 million subscribers on its wireless network.
3. Telkom:
Telkom is South Africa’s largest telecommunications company and its 3G network is used mainly by locals. It has about 14 million subscribers, most of whom are DSL subscribers. Vodacom and Telkom have been engaged in a bitter rivalry for years over the high-speed Internet market in South Africa, where it has been contended that the two telcos will soon be forced to merge into one company and share their network infrastructure due to competition from exponentially growing providers that it is expected to incur.
Conclusion:
As competition in the telecommunications industry increases, Vodacom will be hard-pressed to maintain its market share and repurchase its falling market share. So far, its strategies have created positive results for the company. Vodacom has managed to retain its dominant position in South Africa’s cellular phone market for more than a decade by introducing disruptive innovations that have met the changing needs of consumers. It is, therefore, difficult to predict whether this strategy will lead to success over the long term.
The rest is not yet clear whether Vodacom’s drive for urbanization will pay off or whether they are simply growing too fast for their good.
Some frequently asked questions and answers:
1. How much does a Vodacom data pack cost?
A. Data packs for Vodacom start from 1GB and go up to 20 GB. They cost R15 per 1GB. To get data, the customer needs to send a message from his/her cell phone to 50863.
2. What is the procedure for activating a Vodacom SIM card?
A. A customer has to get a Vodacom sim card from a mobile dealer or one of their stores that are called “Vodacom shops”, then activate the sim card by sending a text message to 30595 with the words “ACTIVATE <10letter PIN>.
3. What is the procedure for canceling a Vodacom service?
A. The Vodacom customer has to send the following text message to 32149: “CANCEL <10digit phone number>.
4. What is the procedure for transferring a Vodacom SIM card?
A. The customer has to call 50881 from their cell phone and ask for a “transfer” charge of L1000 to be transferred to their new sim, then give them an account number (Vodacom account number or orange account number). After that, they will activate the new sim.
