Vodacom and French telecom group Orange have signed a deal to create a joint venture to build and operate cellphone towers in the Democratic Republic of Congo (DRC), underscoring the move towards greater shared infrastructure investment in the sector.
Across the world, and perhaps more starkly in Africa, rural areas have tended to have low network coverage levels as telecom operators have avoided investing there because of the expense. Providers would rather invest in towns and cities with big populations who are major consumers of communications services.
This is one of the main reasons for the explosion in adoption of low Earth orbiting satellite services like Starlink and Eutelsat OneWeb.
To ease some of the financial burden, while ensuring increased connectivity rates, Vodacom and Orange have decided that a joint venture is the way forward in the DRC, where mobile internet penetration is at 32.3%.
On Tuesday, the two companies said they had joined hands to form “a first of its kind” rural tower company partnership in Africa.
The partnership will see the companies working together to build, own and operate solar-powered mobile base stations in underserved areas of the DRC.
The operators said “the initiative will extend network coverage and enable access to telecommunications and mobile financial services” to up to 19-million people in less densely populated rural communities.
Vodacom and Orange have pledged to jointly construct up to 2,000 new solar-powered base stations over six years, using 2G and 4G technologies. The project begins with an initial commitment of 1,000 sites, after which the companies may elect to scale the project by a further 1,000 towers.
This project is another example of Vodacom’s belief that infrastructure investment increasingly requires co-investment, or at least the pooling of resources, to get it right.
As with the R10bn spent annually by Vodacom and rival MTN in recent years to cover 99% of SA with their mobile networks, a similar effort is needed to connect rural areas or push up fibre rollouts, which all come at huge cost. As such, operators are finding ways to pool their resources and share the risk.
In a statement, Shameel Joosub, group CEO of Vodacom, said: “With a footprint serving over 210-million customers across Africa, we have the opportunity to significantly contribute to the continent’s socioeconomic development by building a digital society and fostering inclusivity for all.
“This aligns with our purpose to connect for a better future, and our partnership with Orange is a crucial step towards providing mobile coverage to people in previously underserved areas in the DRC.”
In SA Vodacom and Remgro’s push for a fibre joint venture had faced fierce opposition from local authorities, the Competition Tribunal announcing, in October, its decision to block their tie up.
The proposed deal would result in Vodacom taking a 30% stake in Maziv, which houses Remgro’s fibre units Vumatel and Dark Fibre Africa — together worth an estimated R13bn — with the option of increasing the stake to 40%.
In the DRC, completion of Vodacom and Orange’s joint venture remains subject to the approval of administrative, regulatory and competition authorities. Thus, it remains to be seen if there’ll be any opposition to the deal.
It helps then that the project furthers the DRC government’s National Digital Plan Horizon 2025, adopted in 2019, which aims to foster digital transformation across various sectors.
With the first base station expected to start operating in 2025, the companies will share active and passive equipment owned by the joint venture as anchor tenants for an initial term of 20 years.
The infrastructure will be available to any mobile network operator “wherever technically feasible to increase usage and promote a wider range of options for the population.”
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