South African telecom leader Vodacom and French telecom giant Orange are in discussions to establish infrastructure partnerships across Africa, aiming to reduce connectivity costs and enhance rural access.

According to sources cited by Bloomberg, the potential agreements would involve sharing infrastructure in overlapping markets, including Egypt and Congo. This collaboration seeks to make network rollout more cost-effective and to improve communication services in under-served areas.

“Our aim is to alleviate the costs of rollout and rural connectivity, helping to address costs to communicate and narrow the digital divide,” a Vodacom representative told Bloomberg. This initiative reflects Vodacom’s commitment to expanding its reach and improving network accessibility across the continent.

While Orange declined to comment on specific discussions, the company acknowledged the practicality of such partnerships. “Sharing certain network infrastructure with other operators in large territories makes sense,” an Orange spokesperson stated, emphasizing the operational efficiencies and enhanced service potential of these collaborations.

Both Vodacom and Orange are keen on strengthening their presence in Africa, recognizing the continent’s significant growth potential despite its infrastructural challenges. These discussions represent a strategic effort to pool resources and streamline operations, aiming to deliver improved connectivity to millions of new customers.

Vodacom is also exploring similar infrastructure-sharing agreements with other mobile operators and investors within its operational regions. Although no final agreements have been reached, the potential partnerships between Vodacom and Orange could pave the way for more affordable and widespread connectivity in Africa.

Enhancing Connectivity in Africa

Africa’s telecom market is expanding rapidly, driven by a youthful, tech-savvy population and increasing smartphone use. However, high infrastructure costs and connectivity challenges persist. By collaborating, Vodacom and Orange aim to address these issues, providing a more robust and accessible network to a broader audience.

This move also reflects a broader trend in the telecom industry towards collaboration and resource-sharing to achieve sustainable growth and competitive advantage.

About the Companies:

Vodacom, based in Johannesburg, is one of Africa’s largest mobile communications companies, serving over 120 million customers. Orange, headquartered in Paris, operates in 26 countries in Africa and the Middle East, with a global customer base of 266 million.

The industry is closely watching these discussions, as their outcome could reshape the competitive dynamics and connectivity landscape in Africa.

photo source: Google

By: Montel Kamau

Serrari Financial Analyst

21st May, 2024