One of every five phones currently sold by Vodacom are smartphones. And that means true smartphones – the “top 2%”, if you will.<\/p>\n
At Monday’s interim results presentation<\/a>, Vodacom CEO Pieter Uys<\/a> highlighted the group’s ever-expanding portfolio of top handsets: Apple iPhone 4<\/a>, the BlackBerry Torch<\/a>, Samsung Galaxy S<\/a>, the first Windows Phone 7<\/a> device on the market – the HTC Trophy and the Nokia N8<\/a>.<\/p>\n It simply cannot keep up with demand for the iPhone 4, a situation that MTN South Africa MD Karel Pienaar also finds himself in.<\/p>\n South Africans are becoming just as obsessed with high-end phones as the rest of the world. With this enormous growth – there are now 2.5m smartphones on the Vodacom network, 65% more than a year ago – comes an insatiable appetite for data.<\/p>\n One in five iPhone users on Vodacom purchase additional data bundles. Now, this could be because Vodacom only bundles 250MB of data a month on its iPhone contracts… That said, Uys says that by their third month of owning an iPhone, subscribers use 50% more data than they did in month one.<\/p>\n Overall, 21% of smartphone users recharge with data bundles.<\/p>\n Uys admits he is “just as excited about data” as he was six months or even a year ago. He says it is “key to the company’s future”.<\/p>\n In the past two quarters (from Q4 2010 to Q2 2011), Vodacom has signed up 500000 more data bundle users in South Africa – these are customers who recharge every month. That number now sits at 1.9m.<\/p>\n Its overall data users (subscribers who use the internet on their phones\/wireless modems) total 7.9m – 35% of its total subscriber pool (from 6.7m or 28% in Q4). Even more staggering is that there are 916 000 3G\/HSDPA USB modems (“dongles”) active on the Vodacom network (a 46% increase year on year).<\/p>\n But it’s not just about the real high-end smartphones. Vodacom knows it needs to drive adoption of mobile internet into the lower LSM groupings – consumers who cannot afford a R400 a month contract (or an R8000 phone).<\/p>\n With the global buying power of parent Vodafone, it’s launched the cheapest Android smartphone – the Vodafone 845 – which retails at R1399.<\/p>\n Beyond this, it’s released what it terms “smarter phones” – not quite smartphones, but not dumb ones either. The Vodafone 546 – a full QWERTY device – retails for R699, while the Vodafone 543 touchscreen at just R499. These offer (proper) access to mobile internet and e-mail.<\/p>\n It’s also preloaded lower-end \u2018feature phones” with Opera Mini to enable better internet browsing. It’s sold 600 000 of these preconfigured phones, with a total of over 1m live on the network. Customers who use Opera Mini to browse the internet use around three times the normal amount of data – an astonishing statistic, given the high and efficient compression rate offered by Opera Mini.<\/p>\n Once subscribers are used to using mobile internet, Uys says the plan is obviously to “upsell dongles [3G\/HSDPA modems], notebooks” and high-end phones.<\/p>\n Uys says that with data bundle re-pricing and repackaging, the effective price per megabyte has decreased by 16% y\/y.<\/p>\n Data traffic is up 60% versus the first half of last year. This strong growth means that data now accounts for 55% of the total traffic on Vodacom’s South African network.<\/p>\n It’s working hard on expanding its network (especially 3G coverage), and will spend R4.7bn on capex in the second half – more than double what it spent in the first. A lot of this has to do with the fact that because of Telkom’s network freeze surrounding the 2010 World Cup, Vodacom (and MTN) simply couldn’t spend what they wanted to on expanding networks.<\/p>\n Uys also mentioned that while there were currently “only” 500m mobile internet users worldwide, this number was expected to increase to between 2bn and 2.5bn by 2015. Mind-blowing stuff.<\/p>\n By then, smartphones will be as common as the Nokia 3310 once was.<\/p>\n All hail the smartphone<\/strong><\/a> << Comments and views<\/p>\n