Vodacom’s biggest blunders

Vodacom is the largest telecommunications company in South Africa, with 34.1 million customers and the largest mobile network.

Vodacom’s voice network covers nearly the whole of the country, while its broadband network offers a population coverage of 98.3%.

The company also has a strong presence in many other African countries – Tanzania, the Democratic Republic of Congo, Mozambique, and Lesotho.

Vodacom is one of SA’s biggest success stories, but that does not mean the company did not make mistakes along the way.

Here are some of Vodacom’s biggest blunders over the last 22 years of operation.


Vodacom lost billions by buying Gateway Communications

Gateway

Vodacom bought Gateway Communications in December 2008 for $675 million as part of its African expansion plans.

Things did not work out, and Vodacom had to take an impairment charge of R3.2 billion on the unit after traffic volumes fell.

In June 2012, Vodacom entered into an agreement to sell certain investments, supplier agreements, and assets of a Gateway unit – Carrier Services – to PCCW Global for $26.4 million.


Vodacom selling its stake in iBurst meant it lost out on valuable spectrum

iBurst for sale

Vodacom owned a 24.9% shareholding in iBurst/WBS, which gave the company access to iBurst’s 1,800MHz and 2.6GHz spectrum.

Vodacom had a choice to increase its iBurst stake, or sell its shares and apply for new spectrum through Icasa. Vodacom put its trust in Icasa’s spectrum process, and sold its stake in iBurst.

Icasa’s spectrum plans never materialised, and Vodacom lost its shareholding – and access to spectrum.


Vodacom made many poor investment decisions, and also handled these investments poorly

Vodacom call centre banned

Vodacom made multiple investment in South African companies over the years, but many of these investments failed. Some examples include Gogga, Zoopy, Vodacom Gated Services, The Grid, and Gateway.

Some of the companies which Vodacom invested in accused the operator of not providing the support promised, and reneging on its side of the partnership.


Vodacom’s plan to combat Mxit through its IM platform Meep was a massive failure

Vodacom smartphone

In 2007, Vodacom launched Meep – a real-time, presence-based Instant Messaging service. This was supposed to compete against the dominant player at the time, Mxit.

Vodacom said that Meep offered “a transparency in terms of pricing where Meepots are the official currency of the Meep world – sold in bundles”.

Meep never gained traction, and was shut down without much fanfare.


Vodacom’s social platforms The Grid and Heroes of Echo never lived up to the hype

Vodacom TheGrid

In 2007, Vodacom launched The GRID – a location-based mobile social network that allowed users to chat to friends, see where they were on a map, and share photos or videos with them.

It never lived up to the hype, and Vodacom closed The Grid on 1 December 2012.

Vodacom’s Legends of Echo – a location-based multiplayer social game for mobile phones – did even worse.

It never gained any support, and was quietly discontinued by Vodacom not long after its launch.


Vodacom experienced a country-wide network outage, but decided to say little through its official channels

Angry man with cellphone

On 30 June 2011, Vodacom experienced its worst-ever network downtime, caused by multiple transmission failures and subsequent network congestion in some areas.

Vodacom’s official communication about the downtime was poor, and saw Vodacom CEO Pieter Uys resort to Twitter to inform people what was happening, and what they were doing to resolve the problems.


Vodacom double-billed its customers in the beginning of 2016, right when people started to run out of money

Vodacom Shares

On 1 January 2016, many Vodacom subscribers took to social media to complain that they had been double-billed by Vodacom.

Vodacom refunded these subscribers a few days later, and offered them free data to make up for the mess.


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Vodacom’s biggest blunders