Vodacom and Orange have “joined hands” to launch a rural TowerCo joint venture in the Democratic Republic of Congo, seeking to collaboratively expand rural network infrastructure.
The JV will have Vodacom and Orange’s local businesses as anchor tenants for a 20-year term, sharing both active and passive equipment. Other mobile network operators will be invited to utilise passive equipment where “technically feasible”.
Initial plans will see the construction of 1,000 new solar-powered 2G and 4G base stations over the next six years, with an option to extend to a further 1,000 sites.
The as-yet-unnamed JV requires regulatory approvals, but the pair expect the first site to go live before the end of the year.
Confirmation this morning comes more than six months after initial rumours of the potential for a Vodacom–Orange mobile towers tie-up. In May 2024, Bloomberg reported the duo were considering ways to minimise rollout costs and expand rural coverage in Egypt and the DRC, where both have a presence.
The focus was said to be on reduction of rollout costs and expansion of rural mobile coverage, both priorities cited by the pair in today’s announcement. The prospect of an Egyptian expansion has not been mentioned.
Rural reach
Conscious of the need to win over regulators, Vodacom and Orange have talked up the potential for the JV to reach currently underserved communities in rural regions, bringing access to mobile and m-money services to “up to 19 million people” in less densely populated areas.
The DRC is the second largest country on the continent, with a population of more than 105 million people. Mobile data penetration remains at just 32.3%, however, and Vodacom estimates that mobile connection penetration sits around 51%.
The plans for up to 2,000 additional base stations are not insignificant. Orange DRC currently operates 3,400 sites, 90% of which are 4G enabled. Vodacom DRC has not reported its site count but at the end of September 2024 had roughly 7,000 4G mobile base stations across its entire ‘International’ footprint, which includes the DRC, Lesotho, Mozambique, and Tanzania.
Vodacom DRC has been working to ramp up its rural mobile reach in recent years in pursuit of “ubiquitous coverage”, as teed up in its latest ESG snapshot published in August 2024. This includes a rural coverage acceleration programme, which added 47 solar-powered mobile sites in the year to 31 March 2024 (FY23–24), for a total of 827 deemed to serve rural communities. Satellite 4G is also being tested for rural populations, as are 5G networks in more urban areas.
Vodacom DRC has 22.5 million mobile customers, 8.8 million of which are data customers. Orange is somewhat smaller, with 15.6 million customers, but does not split out its data subscribers. Airtel DRC claims to have the widest 4G coverage, reaching 83% of the population. It does not split out its customer base from a wider Airtel Africa Francophone grouping.
Digital inclusion
Vodacom and Orange further noted that the creation of the JV aligns with the DRC government’s National Digital Plan Horizon 2025, signed in 2019 to underpin the country’s digital transformation and reduce the digital divide.
For Vodacom Group Chief Executive Shameel Joosub, it chimes with the operator’s broad ambition to “connect for a better future” and increase its reach beyond the country’s population centres.
“ Our partnership with Orange is a crucial step towards providing mobile coverage to people in previously underserved areas in the DRC. ”
Joosub.
Co-build approach extends to mobile
The JV enables Vodacom and Orange to share some of the burden of investment in their respective mobile network infrastructure, with each contributing to an undefined “combined investment” in the initiative.
“ Collaborating with Vodacom by sharing both passive and active infrastructure is the most effective approach to fulfilling our commitment to accelerating connectivity access for everyone, including rural areas, while minimizing our environmental footprint. ”
Jérôme Hénique, CEO for Middle East and Africa at Orange.
In recent months Joosub has talked of the need for scale if operators in emerging markets are to survive, with partnerships and ‘co-build’ emerging as Vodacom’s preferred approach.
In late-2024, the CEO’s comments were made with particular reference to developments in South Africa, where Vodacom is working to appeal the prohibition of a FibreCo acquisition that would, in the Group’s view, enable it to invest and compete in the local fixed market.
The deal, to buy the MAZIV FibreCo and merge it with Vodacom South Africa’s fibre assets, was blocked by the country’s Competition Tribunal but Vodacom has lodged an appeal. In November, Joosub reiterated that despite the blocker, partnerships for infra build will remain the approach of choice. Although speaking specifically about fibre, the Orange towers partnership hints that a similar model might be deployed for mobile.
“ What we’re clear on is that we prefer co-build to over-build. That would be the dominant feature of how we pursue fibre, both locally and internationally. ”
Joosub, following the MAZIV merger refusal.