Vodacom hits the big three-oh

Vodacom is celebrating its 30th birthday this year. It was founded in 1993 as a joint venture between Telkom, Vodafone, and Venfin.

Vodacom’s origins date back to 1991 when an investigation into the cellphone industry in South Africa began. The outcome showed that the future would be in GSM technology.

In early 1993, South Africa’s cabinet ministers authorised two cellular licenses after it decided to create a competitive mobile market.

The government forced applicants to say how their choice of technology would lead to high usage and low costs. Applicants also had to show how they would support South African industry and provide service to poor communities.

Vodacom, which was 50% owned by Telkom, 35% by Vodafone, and 15% by Rupert-linked Venfin, was awarded one of the licenses.

In September 1993, Mobile Telephone Network (MTN) was announced as the winner of the second cellular license.

After political manoeuvring between the governing National Party and African National Congress (ANC), resulting in increased BEE shareholding in the operators, Vodacom and MTN were given the green light.

Vodacom CEO, Alan Knott-Craig, convinced shareholders to spend millions on advertising campaigns to promote their products and services, which would only be launched in 1994.

He believed that first-mover advantage was crucial to establish a strong brand and dominating the South African mobile market.

Vodacom’s first television advertisement featured a blue sky and white clouds advertising airtime.

Vodacom launched its first commercial services on 1 June 1994 and quickly became one of the best-known brands in the country.

The mobile operator’s initial growth projections targeted 250,000 subscribers within ten years, but they quickly realised that demand was much higher. By 2000, Vodacom had over three million users.

Knott-Craig created an exceptional management team, including former Vodacom CEO Pieter Uys, current Vodacom CEO Shameel Joosub, and former CTO Andries Delport.

Under his leadership, Vodacom focused on innovation and was behind many world firsts in the mobile industry.

There was a particularly strong focus on network quality. Knott-Craig was fanatical about having the best mobile network in South Africa and went to extreme lengths to achieve it.

Vodacom and MTN rapidly expanded coverage across South Africa and rolled out the latest technologies as soon as they become available.

Despite the fierce competition between the two telecoms powerhouses, the lead Vodacom established against MTN in the nineties is still there today.

Here are a few of the highlights from Vodacom over the last thirty years.

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1993 – Vodacom is founded as a joint venture between Telkom (50%), Vodafone (35%), and Venfin (15%).

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April 1994 – South Africa’s first democratic elections are held, during which the government agreed to a limited test phase before commercial switch-on. 1,250 cell phones were distributed to election officials.

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1994 – Vodacom’s network is officially switched on, and it launches commercial mobile voice services. Vodacom connected 10,000 customers on the first day, with 50,000 in the first four weeks and 100,000 in the first five months.

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1995 – Vodacom expanded outside of South Africa after being awarded a license to operate in Lesotho.

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1995 – Vodacom sponsors the South African national rugby team, the Springboks, winners of the 1995 Rugby World Cup.

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1996 – The erection of Vodacom’s first cellular mast disguised as a palm tree in Durbanville, Western Cape.

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1996 – Vodacom launched Vodago, its prepaid service, and connected 60,000 customers in the first month.

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1996 – Vodafone and Venfin sold a 5% stake in Vodacom to Hosken Consolidated Investments, A BEE company, for R118 million.

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1998 – Vodacom launches prepaid dialup Internet access – a world first.

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1998 – Vodacom opens Vodaworld in Midrand, the world’s first cellular shopping mall.

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1999 – Vodacom is awarded a GSM license in Tanzania.

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2000 – Vodacom CEO Alan Knott-Craig with many of his executives.

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2000 – Vodafone acquired a 40% holding in SafariCom, the largest mobile operator in Kenya. SafariCom became an important strategic partner for Vodacom.

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2001 – Vodacom becomes Tanzania’s largest mobile network provider after one year of operations. It provides coverage to Mount Kilimanjaro, which became the highest point in the world to be covered by a GSM network.

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2001 – Vodacom completes its R124 million Century City regional headquarters in Cape Town.

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2002 – Hosken sold its 5% stake back to Vodafone and Venfin for R1.5 billion, through which it made a 1,171% profit. Vodacom launches in the DRC.

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2003 – Vodacom launched in Mozambique.

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2003 – Vodacom’s coverage extends to more than 900,000 square kilometres of South Africa’s roads and over 95% of the population.

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2004 – Vodacom launches 3G in South Africa. 3G technology dramatically increased the speed of data transmission.

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2004 – Vodacom South Africa surpasses the 10 million customer mark.

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2005 – Vodacom launched Vodafone Live! in South Africa.

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2006 – Vodafone increases its shareholding in Vodacom to 50%.

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2006 – Vodacom launches a 3G High-Speed Downlink Packet Access (HSDPA) network in South Africa. Vodacom Ventures launched.

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2007 – Vodacom buys a stake in WBS/iBurst.

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2008 – Vodacom Business launched at a glitzy affair in Sun City.

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2008 – Pieter Uys took over from Alan Knott-Craig as Vodacom CEO on 1 October 2008.

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2008 – Telkom sold a 15% share of their holding in Vodacom for R22.5 billion. This is regarded as one of the biggest blunders in South African telecommunications history.

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2009 – Vodacom listed on the JSE. Vodafone increased its shareholding in Vodacom to 65%.

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2011 – Vodacom rebranded and changed its logo colour from blue to red.

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2012 – Vodacom is the first network to launch LTE in South Africa.

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2012 – Vodacom CEO Shameel Joosub takes over from Pieter Uys.

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2013 – Vodacom announced a R7 billion deal to acquire Neotel, but the deal later fell through.

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2014 – Vodacom covers 99.8% of the population in South Africa.

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2015 – Vodacom reaches 65 million active customers.

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2018 – Vodacom launched commercial 5G in Lesotho. It was a first in Africa.

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2020 – Vodacom donates 20,000 smartphones, 100 terabytes of data, and 10 million voice call minutes to the National Department of Health to combat the Covid-19 pandemic.

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2020 – Vodacom signs a landmark agreement with Alipay to drive digital and financial inclusion.

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2021 – Vodacom enters the largest deal in its history, exchanging R43 billion to acquire Vodafone’s Egypt operations.

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2021 – Vodacom launches the VodaPay super app in South Africa.

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2022 – Safaricom Ethiopia switches on its network and services in Addis Ababa. Through its 34.9% stake in Safaricom and its 6.2% direct stake in Safaricom Ethiopia, Vodacom Group holds an effective 25.7% interest in the Safaricom Ethiopia business.

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2023 – Vodacom turns 30!

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This article was first published by Daily Investor and is republished with permission.

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