Vodacom is testing 5G connectivity in the Democratic Republic of the Congo (DRC), under the supervision of the industry regulator, but its primary focus is on improving 4G base station deployment and expanding mobile money capabilities across the populous African country.
That’s according to CEO, Khalil Al Americani, talking to ITWeb Africa, in an exclusive interview, on Monday.
Al Americani said that the Congolese 5G test will help lead the company in developing viable use cases, when it rolls out the network upgrades in the future.
“Under the regulator’s supervision, we are testing 5G technology, with certain sets of frequencies to ensure that we are technically prepared,” he said.
However, the Congolese mobile operator was ‘yet to get clarity’ on the licencing criteria for commercial rollout, from the government.
Nonetheless, Vodacom Congo expects that use cases will probably be directed towards its enterprise segment, as well as ‘some applications’ for government and the Internet of Things.
DRC has a population over 100 million people, while Vodacom has 21 million mobile subscribers, and data subscribers account for 7 million of the company’s mobile network consumers.
For the time being, according to Al Americani, Vodacom’s top operational and commercial objective in the DRC is to continue building out 4G across the country and 3G in some places.
In its June 2023 quarterly report, Vodacom stated that it has bought additional spectrum in the country, an investment it sees as critical to providing ‘affordable data pricing’ and ‘unlocking’ the potential of fixed-wireless access.
“There’s still a long way to go before we start rolling out 5G. It will necessitate a much denser mesh network of sites, because we’re using higher frequencies. As a result, major deployments and corresponding capex will be required,” he said.
Vodacom’s aggressive data network rollout in the DRC has not been without its hurdles. Despite investing in renewable energy alternatives such as solar, hybrid, and lithium batteries, nearly all of Vodacom Congo’s base stations rely largely on diesel generators.
Theft of such equipment has been a significant setback. Vodacom Congo is working with communities to develop mitigation techniques for lithium battery and solar panel theft.
Despite these failures, the new sites are making considerable contributions, with data revenue increasing by 30% year on year. Nonetheless, the telco is looking to diversify its revenue streams.
“There is a shift from traditional voice to data, as well as financial services,” said Al Americani. “And, of course, there is the enterprise market, which is seeing some growth in usage, particularly in data and financial services.”
He cited increased smartphone usage as a critical enabler of digital and financial inclusion.
Vodacom has a smartphone penetration rate between 30% to 35%, with a peak in Kinshasa of around 50%, said Al Americani.
Mobile money transactions could also be completed on the company’s mobile applications using 3G and 4G enabled handsets, he added.
Mobile money is one of the low-hanging fruits that the operator, as well as others like Airtel Africa and Orange, perceive as ripe for the taking.
Vodacom has six million ‘30 day active’ mobile money customers in the DRC, however they are still adjusting to the platform’s mobile application version.
The app’s use was still in the early stages, said Al Americani. “A lot of our mobile money is still on the basic services like cash-in, cash-out, and peer-to-peer, which is basically deposits and transfers.”
To increase utilisation of its mobile money platform, Vodacom Congo has established an API on its platform, allowing it to link with banks and enable bank-to-wallet, wallet-to-bank, and other services, such as forex trading and loan services. As a result of this integration, commercial online sites may now accept mobile money payments. The country has a banking sector penetration rate of about 15%.
In a cash-heavy country, the volume of payments handled on Vodacom Congo’s mobile money network equal to 30% of the country’s $55 billion GDP, he claimed.
“It sounds like a lot. It is, in fact. But we’re seeing that it can go much higher, so the goal is to increase mobile money penetration so that more and more of the economy passes through a formalised payment channel,” he said.