Vodacom’s 6 biggest headaches

Vodacom recently announced its interim results for the six months ended 30 September 2015, which included strong revenue and customer growth.

The company now has 65.1 million active customers across Africa, and grew revenue by 6.4%.

Across the group, data revenue is up 33.5% and the number of active data users increased to 28.3 million.

Vodacom is, however, also facing many challenges. This includes regulatory and legal challenges in its local and international operations.


Legal claim of R198 billion brought against Vodacom Congo and Vodacom International Limited

Alieu Conteh

Vodacom faces various legal matters in its operation in Congo. The most recent is a claim brought by Alieu Badara Mohamed Conteh in the Commercial Court of Kinshasa against Vodacom International Limited (VIL) and Vodacom Congo.

Conteh is the controlling shareholder of Congolese Wireless Network (CWM), a minority shareholder in Vodacom Congo.

The legal challenge seeks to liquidate Vodacom Congo, and the payment of various sums to CWN and Conteh. The action includes a claim for $14 billion against VIL for its alleged role in undermining Conteh’s position as a former statutory manager.

Vodacom said Conteh’s claim is without merit.


Competition Commission complaint by Cell C

Cell C logo on blueCell C has lodged a complaint with the Competition Commission, alleging that Vodacom South African has abused its market dominance.

Cell C argued that Vodacom and MTN acted anti-competitively by discriminating between their on-net and off-net effective prices, which has an impact on the smaller operators’ ability to acquire new customers.

Investigations into this complaint are ongoing, and Vodacom is in the process of complying with new information requests in this regard.


Call termination rates legal battle with Cell C

Cell C logo

Icasa promulgated the final call termination rates regulations on 30 September 2014.

Cell C was not happy, and on 15 December 2014 the operator filed an application with the High Court to review and set aside Icasa’s decision on call termination rates. If Cell C gets its way, it could have a significant impact on Vodacom and MTN’s revenues.

Vodacom is opposing Cell C’s application, which will be heard by the High Court on 7 March 2016.


Vodacom’s struggle to buy Neotel

Neotel Vodacom

Vodacom has invested a lot of energy to acquire Neotel, but the deal still needs regulatory approval by the Competition Tribunal.

Vodacom’s application before the Competition Tribunal will be heard between 23 November and 11 December 2015. It is opposed by Telkom, MTN, and Cell C.

Icasa has approved the deal, subject to certain conditions which have been put out for public comment.

However, Icasa’s decision to approve the transaction has been taken under review in the High Court thanks to Telkom, MTN, Cell C, and Internet Solutions.

Vodacom recently announced it was relooking its planned acquisition of Neotel, in what it called “exploring a revised transaction structure”.


A former Vodacom employee wants money for inventing the Please Call Me

Please Call MeFormer Vodacom employee Kenneth Makate instituted a claim for compensation for a business idea that led to a product known as the Please Call Me.

While Makate did not succeed in the High Court and Supreme Court of Appeal, he has now sought leave to appeal in the Constitutional Court.

The matter was heard on 9 September 2015, with judgement not yet handed down.


Customer registration in African operations

Vodacom smartphoneThe implementation of customer registration requirements in Tanzania, the Democratic Republic of Congo, and Mozambique is in progress.

In each country, the industry is engaging with authorities to improve the process to ensure customer registration.

Recent new regulation in Mozambique set a deadline of 28 November 2015, and Vodacom said it is actively registering customers.

In Tanzania and the DRC, authorities continue to monitor compliance with regulations as no deadline is currently set.


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Vodacom’s 6 biggest headaches