From the 1st of April we will have Vodafone competing against Vodacom for our money in Zambia. Vodacom currently owns iConnect one of the original Zambian ISPs and Afrimax uses the Vodafone brand to establish an in-country presence.
Afrimax, which is headquartered in the Netherlands, started in 2010. We have built up the largest portfolio of 4G TD-LTE spectrum in a number of countries across Sub-Sahara African. We are now starting commercial operations in our licensed markets, bringing the Vodafone brand to new parts of Africa and providing world class products and services to over 220 million people in the Afrimax-Vodafone markets.
Why are they competing in the same market?
iConnect was the original 4G network with their WiMAX platform and their refreshing marketing campaign around a parrot was new on the scene, the two factors resulted in massive growth culminating in them being awarded Number 1 ISP by the regulator; read our article on that here. Several innovations were launched by the network soon after the Vodacom purchase, these included 4G WiMax, rebranding, iConnect stores, free web and domain hosting with business packages, the Google global cache and numerous others. In the recent past the company seems to have lost its imagination and core value proposition with no new data products, a marketing campaign around chitenges and growing customer discontent.
Onto the scene steps Afrimax, the new entrant. Afrimax will launch a 4G LTE network much like MTN Zambia. Afrimax is a Vodafone partner and Vodafone are a 65% share owner of Vodacom. Vodacom own 100% of iConnect. Afrimax will launch under the Vodafone brand on the 1st of April and will service the personal and business market segments for data services. If Afrimax Zambia emulate Vodafone Uganda with their personal segment packages of ZMW8.49 per 1GB for a daily bundle they will be a welcome disruption in the market, forcing a much needed shake up of the fixed wireless product offerings.
Afrimax are investing CapEx (Capital Expenditure) and leasing the Vodafone brand in a new company rather than refresh the entity owned through a subsidiary, this is not good use of capital when taken at face value. The CapEx investment includes a new data centre in Roma, capacity leases from Liquid Telecoms for metro fibre, tower lease from IHS, spectrum purchase from the regulator and hardware purchase from ZTE and others. Would it not have been better to spend that capital upgrading iConnect’s network and rebrand that? Why have a franchise competing with a wholly owned company? The investment has the ability to erode iConnect’s revenue, weakening their place in the market.
There is no mention of a 4th operator but we have to ask the questions why spend the money? Who will be left singing
Disclaimer: The author used to work for iConnect