Telecom Review conducted an interview with Philippe Vogeleer, Group Head of Business Development, Vodafone Group, to discuss the recent entry of the World Bank Group into the global consortium that Vodafone, Vodacom and Safaricom formed a couple of years ago with Sumitomo Corporation and British International Investment, and the opportunities opened by this innovative way of delivering projects via repeat work with select strategic partners. He also elaborated on how Vodafone is serving its belief in a digital society, and shared thoughts about the evolution of the digital world and mobile connectivity.
How does Vodafone contribute as a member of this unique consortium, especially considering the deal recently signed with the World Bank Group?
When the government of Ethiopia decided to open their market some years ago, we thought that because it's a huge market — 120 million people, 3.5 times the landmass of Germany — it would be better for us to work on this opportunity with strategic partners. That's how our consortium was originally created: the members of the Vodafone family decided from the start to team up with companies from Africa, Europe, Asia, and North America to make sure we would bring the best of the planet to this unique project.
We originally formed a consortium between British International Investment (BII), Sumitomo Corporation, Vodafone Group, Vodacom and Safaricom to invest in this project, supported by a series of US and local supporters. The rest is history: 12 contenders originally entered the Ethiopia license race, which we ultimately won; we have since deployed a mobile terrestrial network and attracted more than four million customers to it in the seven months since launch.
In June 2023, we received a major boost with the news that the World Bank Group, one of the world’s largest development finance institutions, would team up with us. The negotiations for what is now one of the largest investments of the World Bank Group (WBG) in Africa were led by Vodafone Group, in full alignment with our partners. We’ve decided since to expand this cooperative concept and proposed to the same top partners to work together on multiple projects.
First things first: the International Finance Corporation (IFC), the private sector arm of the WBG, is making a $157.4 million equity investment into Safaricom Ethiopia’s parent company, the Global Partnership for Ethiopia (GPE). IFC is also providing a $100 million loan as a first tranche of debt facilities. The Multilateral Investment Guarantee Agency (MIGA), the member of the WBG that provides political risk insurance for projects, is providing a 10-year insurance guarantee of $1 billion.
The members of our consortium are working in parallel on various “repeat” partnerships involving the same organizations, so that we can bring the same approach of teaming up with select strong partners to multiple projects in various regions. We are currently working on dozens of projects this way in areas as diverse as infrastructure, energy, platforms, devices, and services. Fascinating to see a cooperation concept originally created for a unique project now developing as a new way of working elsewhere.
Vodafone believes in a connected digital society. How are the company’s networks, products and services serving this belief?
Vodafone decided a long time ago that, to grow, it should closely associate itself with the development of society. So, very concretely, we can help you as a person, or we can (try to) help the whole of society including you. We chose the latter. For that, we need to understand what each of the countries in which we deliver services is trying to achieve in terms of development, and then think about the services we can bring that can make a difference to those societal objectives.
We do a lot of analysis with local and international partners to understand the countries in which we deliver services and the needs of the population so that we can deliver tangible solutions. We understood rapidly that we should choose our battles to be successful at scale, and we adapted to that: focus is key in business, so we decided to use the framework of the Sustainable Development Goals (SDGs) of the United Nations to structure our work, and to focus on the SDGs for which we can have the most impact.
The investments required to deliver are very significant. We now know that doing those investments alone is not the sole solution anymore, as evidenced by the success of our consortium in Ethiopia, and that companies can increase their chances of success by teaming up with other organisations sharing their values. Having myriads of partnerships is probably not the solution either – too complex operationally. The sweet spot seems to be in repeat partnerships with a small number of very strong partners.
Tell us more about Vodafone's strategy to serve emerging markets.
Vodafone essentially has three divisions. First, we own or co-own a portfolio of telecom companies. Vodafone is one of the largest suppliers of mobile, next-generation broadband and television services in Europe. In Africa, we supply mobile and broadband through the Vodacom and Safaricom brands and are also the continent’s largest supplier of mobile financial services via M-Pesa and the VodaPay app.
Then we have our partners; we have a very large number of those — 29 telecom companies in 46 countries that we do not own but support to deliver their objectives.
Then we have a third division, named Vodafone Business, where we help companies grow their business around the globe. The latter can take various forms, from delivering advanced telecom services to them to working with suppliers to deliver innovation to even possibly co-investing in technology-based change with them. Low latency 5G private networks in industrial plants are an example of the latter.
For emerging markets, we will continue to provide a mix of those three approaches: grow our mobile broadband and financial services business by investing ourselves or alongside our key partners; partner with telecom companies or other tech companies in some other markets to deliver solutions; and serve individuals and businesses the best way we can, with a view to contributing to economic development.
From your perspective, how could Vodafone support the evolution of the digital world and ongoing innovations of mobile connectivity?
Mobile is going through fantastic changes. 5G is a phenomenal technology. It's much faster and efficient than 4G before, with the ability to connect far more devices than ever before to mobile sites. The possibility of bringing accuracy and processing very high volumes of data opens doors to a whole raft of innovations at all layers of society, which is absolutely fascinating.
Our industry is also in the process of shifting towards open RAN, a technology that will greatly increase the number of vendors providing network equipment. That will enhance innovation and network performance and drive down costs over the long term.
Last but not least, a new generation of low-earth-orbit satellite providers will also literally change the rural telecom landscape, especially in remote and very remote areas, by enabling operators, in the case of our partner AST SpaceMobile, to deliver mobile broadband directly to smartphones in far more regional locations than was ever possible in the past.
I think that these changes will transform once again the role that telecom players have: mobile started 35 years ago as a means to empower individuals; it then evolved some years ago as a way to help solve societal challenges; and it is evolving again to deliver connectivity in more locations and become an integral part of industrial production in parallel. A deeper part of the fabric of each country, if you want.
Delivering this new round of developments will of course require investments and very advanced skills at the same time, which means that partnerships between top organizations bringing each piece of the puzzle together will become ever more important. All extremely exciting indeed!
