Wednesday, November 30, 2011

Vodacom re-enters telecoms market, vows to reduce internet transmission costs



Ben Uzor Jr & Loveth Anazodo-Udeh

Following the successful acquisition of the carrier services and business network solutions subsidiaries of Gateway Telecommunications SA for $700 million, Vodacom Group, yesterday declared its re-entry into Nigeria’s highly competitive telecommunications market. The firm has also promised to significantly reduce the cost of moving bandwidth capacity emanating from the underwater cables specifically for corporates by virtue of its robust national terrestrial network covering 26 states in the country. Vodacom said it had discovered that the price of moving internet capacity from Lagos to Abuja is much higher than the cost of moving capacity from Lagos to London due to poor transmission backbone.

Speaking at a press briefing held in Lagos yesterday, Guy Clark, managing director, Vodacom Business Nigeria disclosed that the telecoms company was not operating as a GSM player but has aligned its infrastructure deployment strategy with that of the Nigerian Communications Commission (NCC) and the new ministry of communications technology’s broadband strategy. The strategy, according to Vodacom, under an open access model will strengthen investment in the area of deploying in-land distribution fibre networks needed to move available bandwidth capacity around the length and breadth of the country. “In 2009, we acquired a company called Gateway Business which was called GS telecom.

“We have spent the last 18 months investing in people, infrastructure and our partners. We have deployed MPLS (Multi Protocol Label Switching) network in Nigeria today which covers 26 states. By the end of our financial year, we will be in all 36 states of the federation. We are not in Nigeria as a GSM company but we anticipated the coming of the submarine cables. The ministry of communications technology and the NCC are earnestly looking for how to take the available bandwidth on the country’s shores to the consumer. We have invested significantly in our MPLS network across Nigeria. We have aligned our infrastructure with the broadband strategy of NCC and the ministry of ICT”, he stated.

Industry analysts told Business Day yesterday that the Vodacom Group still rues its decision to pull out of Nigeria which the company blamed on ‘inappropriate level of risk in the environment’ and other issues bordering on ‘corporate governance and trust’. According to them, Vodacom may be looking to play a fundamental role in NCC’s broadband strategy. However, Clark did not indicate Vodacom’s intention to acquire any licence under a new regime aimed at improving Nigeria’s internet penetration. Commenting on the re-brand, Clark said: “The introduction of Vodacom Business to the Nigerian market is far more than just a new name, logo and colour. We have shifted the way we do things in Nigeria.

“We have made significant investment in our staff together with facilities upgrades and the deployment of our national terrestrial MPLS network. This network roll-out is further supported by our carrier grade Broadband Wireless Access Network allowing Vodacom Business to deliver services end-to-end.” In the same vein, Louisa Van Beek, chief executive officer, Vodacom Business Africa noted, “The rebrand is expected to accelerate Vodacom Business’ operations with customers in the banking and finance, insurance, education and hospitality industries –key markets earmarked for expansion. Its widespread terrestrial MPLS network that spans over 40 African countries is key to delivering upon this objective.

“As new fibre cables arrive into Nigeria, communications models and Enterprise service availability is changing at a rapid pace. We are taking the lead to provide our customers with a diversified portfolio of services that they tailor for their respective businesses. It is an exciting prospect to have the privilege of a new brand at our disposal to arm our efforts going forward and we look forward to watching the growth and development of our business into the future”, she concluded.

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