Since the Covid-19 crisis began, global telecoms firms have been responding to increased demand for critical infrastructure that supports new ways of living and working. 

Major firms have been ramping up digital investment to meet new demand, along with new targets focused on digital inclusion and building back better.

“We had to expand and future-proof our networks to cope with increased demand, so we invested R500m ($30m) in them in the first few months of the crisis,” Shameel Joosub, CEO of Vodacom, an African tlc company majority-owned by British Vodafone, tells fDi. 

Reducing the digital divide

The company is active in Congo, Ghana, Kenya, Lesotho, Mozambique, South Africa, Tanzania and Egypt, as well as in Angola and Tunisia partner markets. 

It is also eying the Ethiopian market, where the government is auctioning two new mobile network licences and selling a minority stake in the state-owned monopoly, Ethio Telecom. “With an auction process coming up in February, there will be a chance to offer our voice, data and ‘M-Pesa’ [mobile-based money transfer] services to its population of 110 million people,” Mr Joosub says.

He is focused on addressing high population growth and low mobile penetration in the firm’s key markets. “Additionally, there are opportunities for financial services, such as M-Pesa to continue to grow,” says Mr Joosub. “We are the biggest fintech in Africa with 42 million customers using M-Pesa and another 12 million using financial services in South Africa. Around R2tn  passes through our M-Pesa platforms annually and we generate $1.2bn in transaction fees each year.”

Mr Joosub says mobile penetration in the eight markets in which Vodacom operates is just 22%. “This isn’t just an opportunity for us to expand our footprint, it’s an opportunity for US tech companies to partner with Vodacom,” he says.

Earlier this year, Vodacom inked a deal with Alphabet’s Loon to use the internet access specialist’s balloon-powered solution to expand its network in Mozambique. This enables Vodacom to provide a service to unserved and under-served parts of the country using a network of floating cell phone towers that operate 20km above the Earth's surface. “This shows how innovation can connect the most rural communities in Africa,” says Mr Joosub.

The firm has also joined forces with other mobile operators and Facebook in the 2Africa connectivity initiative, which plans to install a subsea cable to serve Africa and the Middle East. 

Start-ups

Africa's digital divide is also being reduced by start-ups across the continent. Vodacom has made strategic investments into firms such as Mezzanine, a South African company delivering digital solutions to businesses in Africa, including last-mile mobile and the Internet of Things (IoT); and IoT.nxt, an IoT solutions firm. Additionally, it has supported small and medium-sized enterprises (SMEs), such as Bread Box Bakery — a small start-up which received funding from Vodacom Financial Services through the VodaLend Business Term Advance.

Looking ahead, Mr Joosub says digitisation — and reducing the digital divide — is essential for recovery in developing societies. “Financial and digital inclusion are important to us, and digitisation is an important tool for recovery and developing societies. A lack of digital transformation can affect economies and, in Africa, it’s been a big issue. With digital technology you can sell products online, which is useful for financial inclusion.”

In the meantime, Vodacom has provided free phones and data for Africa’s health workers since the pandemic began, to support the supply of personal protective equipment and track-and-trace capabilities. It has also supported the distribution of eVouchers, as well as free access to employment sites and access to digital literacy services, eHealth and eEducation across its international markets. Additionally, Mr Joosub says, it has supplied loan facilities and payment plans to SMEs through Vodacom Financial Services and M-Pesa.

This article first appeared in the October/November print edition of fDi Intelligence.