Vodacom to Install Its Own Fibre Backbone Network in Mozambique
The South African mobile phone company Vodacom has scorned the recommendations from the Mozambican regulatory body, the INCM (National Communications institute of Mozambique) that basic infrastructure should be shared between telecommunications operators, and instead it is pushing ahead with its own network of fibre-optic cables.
The existing national fibre-optic cable is owned by the public telecommunications company, TDM, and Vodacom claims that TDM is providing an unsatisfactory service. At a Maputo press conference on Thursday, the chairperson of Vodacom's Mozambican subsidiary, VM SARL, Salimo Abdula, said that the TDM fibre-optic cable fails, on average, for 180 hours every month.
There was certainly a serious breakdown in late April, when a cut in TDM's undersea cable, about 110 kilometres north of the town of Vilankulo, in Inhambane province, interrupted communications between the south of the country and the central and northern provinces.
Suddenly, in Mozambique's second largest city, Beira, mobile phones ceased to work, and, because they were out of Internet contact with their Maputo head offices, no bank transactions via ATMs were possible. It took two weeks to repair the fault, and would have taken longer but for the fact that a ship with the appropriate equipment was nearby and agreed to do the job.
No cable is invulnerable, and what happened to the TDM cable could just as easily happen to a cable owned by Vodacom or any other company. The real problem is the lack of back-up systems, which will not be solved by every operator putting its own interests ahead of those of the public, and installing their own cables.
Vodacom has already set up its own fibre-optic network in Maputo, and has a microwave system linking Maputo to Beira, and Beira to Chimoio. By the end of 2011, the microwave transmission system should link the other main central and northern cities (Tete, Quelimane, Nampula, Pemba, Cuamba and Lichinga).
Vodacom admits that it is "absurd" for different institutions to make heavy investments in fibre-optic networks covering the same parts of the country, but blames this on the poor quality of TDM's services. Abdula also noted that TDM is the main shareholder in Vodacom's sole rival, m-cel, the pioneer in mobile telephony in Mozambique. "You can't be a player and a referee at the same time", Abdula said of TDM, thus suggesting that it is favouring m-cel.
The chair of the Vodacom Executive Commission, Jose dos Santos, said the company "has reached the conclusion that it would be better to push ahead with our own fibre-optic line because we want to offer a good quality service to our clients".
The INCM would also like m-cel and Vodacom to share their transmission antennae. In principle both companies agree that would be a good idea. In practice, no agreement has been reached over prices, so each continues to build their own antennae, providing Mozambique with twice as many transmission towers as it needs.
The INCM is strongly in favour of operators sharing infrastructures, but does not yet have the power to enforce this. That may change if the country's parliament approves a set of regulations on the matter some time in the next few months. The public tender for selecting a third mobile phone operator has been launched, and it would clearly be absurd to have three sets of mobile phone antennae springing up all over the country.
Although Vodacom has yet to make a profit in Mozambique, the company has pledged to invest a further 2.1 billion meticais (about 63 million US dollars) this year in new technology and expansion of its network. It plans to set up 100 new transmission towers, mainly in the centre and north of the country (which compares with 50 towers erected last year).
Vodacom began its Mozambican operations in 2003, but has yet to break into profit. In the 2009/2010 financial year, its losses were 230 million meticais (about seven million dollars), which dos Santos blamed on the depreciation of the metical against the US dollar and the South African rand.
Despite continued injections of capital, Vodacom's ambition to become the market leader in Mozambique has been frustrated. Currently it claims to have a market share of 45 per cent, leaving m-cel as still the dominant player, with 55 per cent.