The new Vodacom Company, which has already attracted two telecoms heavyweights from Telkom in the form of Wally Beelders and Thami Msimango, is aiming to serve the Vodacom customer base with more complete telecoms solutions rather than merely GSM based products.
The new ECA allows for a more converged telecoms environment, and with Vodacom’s stake in iBurst and their subsequent access to WiMax spectrum, they are well positioned to take advantage of new opportunities in the field.
Acquire an existing ISP or build your own
The main question on the lips of industry players is whether Vodacom will build this new company themselves or acquire an established ISP with most of the infrastructure and expertise already in place.
Vodacom confirmed that they had a few discussions with large ISP players like Internet Solutions and Storm, but added that they have not progressed much further than that. According to Vodacom’s COO Pieter Uys, Internet Solutions is not for sale and the discussions with Storm did not lead anywhere.
Uys pointed out that they are not currently aggressively looking at acquiring an ISP, but are rather looking what is the most effective way - considering their own skills set, possible partnerships and even acquisitions if it comes at the right price - to reach their goal of developing a major player in the telecoms services provisioning arena.
An industry expert, who preferred not to be named, however feels that Vodacom will find it very tough to build a company from scratch which will be able to compete effectively with the likes of Internet Solutions, Storm, DataPro, Verizon Business and even Telkom.
The type of business environment and skills needed in the ISP space is very different from the cellular arena, something that Vodacom seems well aware off. Vodacom said that they are actively looking for Managing Director to lead the new company, and while they are considering their current staff they will most likely recruit an expert from outside the company.
Their current senior staff all hails from Telkom, and contrary to rumors Vodacom pointed out that both Beelders and Msimango approached them after they left Telkom rather than Vodacom head-hunting the two ex-Telkom executives. Chris Volschenk, Chief Financial Officer of the new company, who also comes from Telkom, has been at Vodacom for some time already.
Investing Billions
While Vodacom does not currently have a fully fledged ISP similar to MTN-Network Solutions, it does have smaller divisions offering ISP related services. Uys said that one of the processes currently under way is to combine all of these ‘bits and pieces’ and place them under the management of the new company.
Vodacom is however not merely looking at consolidating their current assets, but rather want to form a very competitive player in the ISP space. Uys said that Vodacom has already invested large funds in their ISP related divisions and services, and will invest Billions more to ensure that they become a ‘big player’.
With this new company Vodacom will compete head on with Telkom in some business environments, but this is nothing new says Uys. ‘We have been competing with Telkom for over 10 years in the telephony space,” Uys pointed out.
Questions were raised as to why Vodacom did not form a joint venture or partnership with their 50% shareholder Telkom for this company, but this did not prove to suit Vodacom’s needs.
According to the cellular provider partnerships can only take them ‘so far’ and issues like who owns the customer and having to look for multiple partners to offer all services made establishing their own venture the most attractive route. Uys further pointed out that their joint venture discussions with Telkom never really got off the ground.
The new company’s name and more details will be released in the next few weeks.
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