Shameel Joosub - Afrikan Heroes

How The Fintech Arm Of South African Telco Vodacom Made $130m Revenue In Four Months

February 5, 2022

Vodacom, South Africa’s top telecommunications company, unveiled the VodaPay super app for smartphone users in October 2021, but it appears to be on a rollercoaster ride. According to the company’s key financial KPIs for the quarter ended December 31, 2021, fintech services revenue surpassed R2 billion for the first time in a quarter, marking a 12.5 percent growth rate.

“Our M-Pesa platform, including Safaricom, continues to scale at an impressive rate, with transaction values up 16.1% to exceed R430 billion per month,” says Shameel Joosub, group CEO.

“We see VodaPay as a precursor to M-Pesa’s evolution and further strengthening our fintech position across our footprint,” Joosub says.

Here Is What You Need To Know

According to Joosub, the company’s VodaPay super app, which launched in October last year, surpassed expectations by collecting 1.4 million downloads and one million registered users in its first three months in South Africa.

The expansion of Vodacom financial services comes as the telecom sets its eyes on being one of Africa’s leading fintech firms in the next three years, with a target of over 70 million clients.

Vodacom is transitioning from a telecommunications firm to a technology company, while also extending its ecosystem of products, allowing it to diversify its revenue streams.

Its revenue increased by 6.4 percent in the third quarter ended in December, owing to rising demand for connectivity and the expansion of new services such as financial and digital services, internet of things, and fixed.

“Our service revenue growth of 4.4% on a normalised basis was in line with the group’s medium-term target and supported by a resilient performance in SA on the back of sustained investment in technology and our network to further enhance customer experience,” Joosub says.

Service revenue for Vodacom’s foreign operations increased 6.7 percent to R5.9 billion, or 3.5 percent on a normalized basis, thanks to the company’s sustained focus on financial inclusion and increased capital spending, according to Joosub.

“The reported growth was underpinned by a 12.9% increase in M-Pesa revenue and a 21.2% rise in data revenue. Tanzania’s financial performance and progress in driving financial inclusion was impacted by government levies imposed on mobile money and airtime recharges. A key focus for our international portfolio is digital inclusion, which will be supported by our growing 21.5 million data customer base and driving higher smartphone adoption, with international customers on smartphones at 12 million,” Joosub says.

How VodaPay Works

Users can safely upload and save money in a digital wallet within the VodaPay SuperApp, which is accessible on the Android and Apple app stores. Users of the VodaPay app can then use it to make purchases, pay bills, and send money instantly and for free. The registration process is quick, and it eliminates the paperwork and delays that come with opening a regular bank account in Africa.

Users can also add their existing cards from any South African bank to the app and use them to make payments.

VodaPay is designed to help customers manage numerous aspects of their lives by allowing them to purchase at their favorite stores, order food, send money, and pay bills all from within the app.

“We’ve also worked with some of South Africa’s biggest and most renowned brands to guarantee that consumers using the VodaPay super-app are spoiled for choice when it comes to making purchasing selections,” Shameel Joosub said last year.

Customers on any mobile network can use VodaPay, according to Vodacom. Vodacom customers will not be charged for any data consumed when browsing or transacting with the app because it is zero-rated. In the near future, VodaPay hopes to extend this offer to consumers on additional mobile networks.

The launch of VodaPay is aimed to broaden the reach of digital financial services in Africa, building on the success of M-PESA, a mobile money platform launched by Vodafone and Safaricom in 2007 that has grown to over 50 million active users and contributed significantly to Africa’s financial inclusion.

M-PESA, which operates in Kenya, Tanzania, Mozambique, the Democratic Republic of Congo, Lesotho, Ghana, and Egypt, saw the number of transactions on its network increase to 4.5 billion in the first quarter of 2021, totaling roughly €63 billion.

Vodacom fintech revenue Vodacom fintech revenue Vodacom fintech revenue

Oracle Launches $1 Million To Invest In Startups In Africa

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

Pandemic Drives Surge in Digital Health Use Across Africa says Vodacom

September 1, 2021

Across Africa, there has been an exponential rise in the number of people engaging with digital health services through their smartphones, creating a vast potential for countries to deliver access to healthcare digitally. This was a key finding of Vodacom’s e-health policy paper released Tuesday as part of the Africa.connected campaign. Based on research and personal insights from recipients across the continent whose lives have been changed because of these services, this paper tells the story of a continent on the cusp of digital health transformation.

The campaign, which was launched earlier this year by Vodacom, Vodafone and Safaricom, aims to accelerate economic recovery across the continent by helping drive digital inclusion.

The first of a series of six policy papers, the e-health paper provides key insights around the role of technology in elevating the healthcare sector – a focus area of development that has been brought to the fore by COVID-19.

“In many ways, the pandemic has also opened our eyes to new possibilities in the healthcare space. Our ability to deliver on the promise of digital solutions at scale presents an enormous opportunity – not only when it comes to the reach of healthcare services, but also to dramatically improved health outcomes at decreased costs,” says Shameel Joosub, Vodacom Group CEO.

A Sector Gearing Up for Transformation

The report reflects a healthcare sector on the verge of transformation. While Governments are accelerating formal digital health strategies – 41 out of 54 African countries have a digital health strategy in place and consumers are dramatically increasing their engagement with digital health services via their smartphones. It is forecast that by 2025, smartphone reach in sub-Saharan Africa will increase by almost 70%.

As a result, informal use of digital healthcare solutions has increased, with 41% of internet users across Africa regularly using their mobile phones to search for health information. Digital health apps have also seen increased usage during the pandemic.

According to Apptopia, the Byon8 app, which offers access to online doctors and symptom check-ups, has shown on average a 40% increase in engagement since March 2021. Growing numbers of private sector players are also entering the sector to meet this demand.

Though the rise in engagement with informal healthcare systems is creating new opportunities, there is also a significant risk in circumventing formal systems. Concerns range from privacy and the security of personal data to medical misinformation, which is a very real threat when it comes to social media.

The report confirms that 69% of South Africans and 55% of Kenyans report that they’ve seen information that is obviously false or untrue on social media.

Perhaps most importantly, informal systems can exacerbate inequality – partly because they preclude users with low levels of digital literacy and partly because they leave the burden of cost with the end-user or healthcare worker.

A key question posed by the study is how countries across the continent can leverage the rise in usage of digital health solutions and integrate them into the formal health system. It suggests three steps in resolving this challenge.

The Call for More Public-Private Partnerships

To avoid the risks associated with healthcare workers and citizens going outside of formal systems, the architecture of a national health ecosystem must be led by Government. As such, the report calls for more partnerships between the public sector and digital health providers on formal systems.

From there, Government can more effectively manage the digital health ecosystem, encouraging the integration of effective start-ups into formal systems and regulating those that could cause harm and spread misinformation.

Lastly, success will depend on the sector’s ability to leverage the informal within the formal. Given the pervasive use of social media, apps and internet searches, it’s necessary to find a way of using these tools safely within the national health ecosystem.

Vodacom’s Mum & Baby service in South Africa is a good example of how this can work successfully. Mum & Baby provides free information about pregnancy and childcare via mobile devices for parents-to-be.

The service includes regular text messages, articles, tutorials, videos, an immunisation calendar, and a pregnancy medicine checker. This service has proved particularly helpful in rural areas where families often battle to access health centres.

“The vision behind the Africa.connected campaign – to help close the digital divide in Africa’s key economic sectors – is ambitious and we understand that we cannot achieve this alone. While this paper explores many of the challenges and opportunities associated with digital health solutions, it underscores the necessity of partnerships between the public and private sectors in driving critical outcomes. We must ‘meet in the middle’, integrating formal and informal digital health systems to harness the current rise in digital health engagement. It is our efforts now, working together to propel digital inclusion, which will determine Africa’s future,” concludes Joosub.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Vodacom May Sale Part of Its Stake in M-Pesa

May 21, 2021

Leading telecoms operator Vodacom Group of South Africa is considering selling part of its stake in mobile money platform M-Pesa to unlock value running into billions of shillings from the fast-growing service. Responding to a question from an analyst who asked if the company is likely to spin off M-Pesa and whether the multinational is willing to sell a stake to external parties, the Telcos chief executive Shameel Joosub said that nothing is off the table.

M-Pesa is currently offered by Vodacom majority-owned subsidiaries in Tanzania, Mozambique, Lesotho and Democratic Republic of the Congo (DRC). Vodacom also owns an indirect stake in M-Pesa’s business in Kenya through its 35 percent stake in Safaricom .

Mr Joosub said the company will consider selling part of its stake in M-Pesa if investors continue to ignore the value of the platform.

“To be honest, we would like the market to give us more credit for our financial services assets and we are not in a position yet where we think the time is optimal to sell or even monetise a portion of the assets because we believe there is still a lot of growth left in M-Pesa,” Mr Joosub said.

“But [it is] certainly something that is in consideration. We have structurally set up in the different markets M-Pesa and financial services into separate entities. So it does give us optionality going forward,” he added in reference to the sale of M-Pesa.

Vodacom Group did not give timelines on the potential sale of the mobile money service, signalling it will hold on to M-Pesa in the short term. Mr Joosub said that should a decision be made to sell part of M-Pesa, the structure of such a sale will have to be defined.

The options include selling a stake in the platform in specific countries or in M-Pesa Global Services – the new joint venture it runs with Safaricom on a 50/50 basis and which aims to take the service international.

The plans to unlock value from M-Pesa comes after rival Airtel Africa signed deals to sell minority stakes in its continental financial service for huge sums through its subsidiary Airtel Mobile Commerce BV.

“In line with our strategy of unlocking value in our mobile money business, we will soon welcome two new minority investors (The Rise Fund and Mastercard) in agreed transactions which value this part of our business at $2.65 billion (Sh286 billion), as well as bringing $300 million (Sh32.3 billion) into the group,” the multinational said when releasing its annual results last week.

Vodafone Plc, the parent company of Vodacom, signalled that M-Pesa could fetch greater sums should a partial sale of the mobile money platform be implemented.

“We are a clear number one in the African market. We have a base of mobile money of over 60 million in active customers. So we are about three times the size of Airtel,” Vodafone’s chief executive Nick Read said on Tuesday in response to an analyst who asked if the multinational will make similar deals like Airtel.

Vodacom’s financial services, including Kenya, had 57.7 million customers and its total revenue stood at R19.3 billion (Sh148 billion) in the review period, representing a six percent increase from R18.2 billion (Sh139.4 billion) a year earlier.

This was despite the loss of R2 billion (Sh15.3 billion) from zero-rating of certain person-to-person cash transfers in most of the markets including Kenya where free transactions lasted between March and December for values of Sh1,000 and below.

Mr Joosub said the telco would prefer that the market recognise the value of the mobile money platform, adding that if not, Vodacom will consider to “at least monetise a portion of these assets going forward.”

Vodacom has a market capitalisation of about Sh1.8 trillion, slightly ahead of Safaricom’s Sh1.5 trillion despite being a much larger firm by revenues and earnings among other measures.

The entry of Mastercard and Rise Fund into Airtel Money’s business indicates investor enthusiasm for Africa’s lucrative and fast-growing financial technology platforms.

Airtel Money generated revenues of $227 million (Sh24.5 billion) from 14 markets including Kenya and Uganda in the year ended March, a 44.5 percent jump from $157 million (Sh16.9 billion) the year before.

This was despite removal of charges on certain transactions in several countries last year as governments worked with telcos and banks to offer financial relief to customers and reduce use of physical cash in the course of the Covid-19 pandemic.

Both Airtel and Vodacom plan to invest heavily in their mobile money platforms which are set to replace the traditional voice business as the growth and profit drivers.

“These are less capital-intensive businesses compared to core mobile so that you gives you a better return on capital profile,” Mr Joosub said.

Airtel says the low uptake of traditional banking services continues to be the main driver of demand for mobile money services.

Airtel Money offers mobile wallet deposit and withdrawals, merchant and commercial payments, benefits transfers, loans and savings, virtual credit card and international money transfers.

The multinational has sought to expand the subscriber base and use of its mobile money platform through partnerships with multiple financial services firms.

It has, for instance, signed agreements with cash remittance companies MoneyGram, Mukuru and WorldRemit.

The telecoms operator also plans to introduce new banking and remittances services in partnership with London-based lender Standard Chartered Plc which has subsidiaries operating in 16 African markets.

Vodacom has similar plans to expand its financial services and has partnered with Alipay, a Chinese mobile and online payment platform that has more than one billion users, to create a new “super-app.”

“Our super-app will offer services ranging from loans and savings, seamless QR and person-to-person payments, to entertainment and personalised shopping experiences, promoting greater financial inclusion,” Mr Joosub said.

“We see this super-app as a precursor to M-Pesa’s evolution, supporting accelerated growth across our financial services’ businesses and assisting us in connecting the next 100 million African customers so that no one is left behind.”

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Vodacom Plans to Launch a New Fintech Service in South Africa

July 25, 2020

South Africa’s major telecoms company Vodacom Group has announced plans to launch a super app that offers financial and lifestyle services to its millions of customers. This decision observers say is not unconnected with its failed stint with M-Pesa, the continents leading mobile money platform. The new app being launched in collaboration with digital payment provider Ant Financial Services will make it possible for consumers in South Africa to shop online, send money and pay bills among other features.

The China based payments company Ant Financial Services formerly known by the name of its signature product, Alipay, is also an affiliate company of Chinese multinational tech company, Alibaba Group. The fintech giant claims to have 1.3 billion users worldwide and is said to be the most valuable private fintech company in the world at $150 billion, a valuation that might see an extra $50 billion when the company goes public in the coming weeks.

This deal with Vodacom will see Ant Financial Services license its Alipay technology platform to the South Africa telco and carry out operations as Vodacom Financial Services. Additional details regarding the terms and offerings of this deal remain unclear at the moment, but from the statement released by both parties, the super app will be launched early next year.

One thing is clear, however: its offerings will not benefit only individual subscribers as small and medium enterprises aren’t exempt. From the statement, financial services such as insurance and lending will be made available for these businesses.

In 2010, Vodacom launched M-Pesa in South Africa, its first launch in Southern Africa before introducing the app in Lesotho three years later. Initially, the adoption of the service was moderate but never reached the heights recorded in Eastern African markets like Kenya and Tanzania. Vodacom revamped the service in 2014 with hopes of better adoption. But after witnessing abysmal progress with 76,000 active users in six brutal years, it shut down the product in 2016.

In South Africa, about 75% of adults in the country have one or more bank accounts, according to a survey done by a FinMark survey. For mobile money to thrive, it needs an underdeveloped financial services industry which is in great contrast to what South Africa has and most analysts say this might have been the main reason why the service flopped in Africa’s second-largest economy. However, the company blamed its failure on the country’s regulatory environment, stating that it was one of the worst regulatory environments for mobile money to thrive in Africa.

Since then, the South African telco has launched a joint venture of M-Pesa with Kenya’s Vodacom. And with equal stake, they both operate the mobile money service in seven African countries. With an imminent partnership with the Ant Financial Services, Vodacom is ready to take on not only mobile money but an array of services on one platform.

“We already offer South African customers an ecosystem of innovative digital financial services products. But this technology partnership with Alipay will enable us to be on par with leading global digital counterparts quicker and more efficiently,” the CEO of Vodacom Group, Shameel Joosub said in the statement.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Vodacom Partners Alipay to Create a Super Logistics App

July 21, 2020

South African consumers are in for a very exciting shopping experience if claims by Vodacom and Alipay on the creation of a new Super-App are anything to go by. This is because the new super app that’ll allow South African consumers to manage their entire lives and business through their smartphone, and this encompases playing music, paying for morning coffees, listening to podcasts, sending money to family, paying utility bills, shopping online and ordering new stock for their businesses.

According to the companies, the app will not only offer a stellar digital customer experience but will also bring to life a market place of goods and services tailored to the South African customer needs. This will be underpinned by a progressive digital payments ecosystem designed to serve both the banked and unbanked parts of the population.Customers and merchants will all find each other on one affordable platform, operated by Vodacom Financial Services, with Alipay as the technology provider.

Shameel Joosub, Vodacom Group CEO said that the partnership is a significant milestone in promoting greater financial inclusion within the communities in which we operate, accelerating our financial services aspirations across Africa, adding that “this technology partnership with Alipay will enable us to be on par with leading global digital counterparts quicker and more efficiently. We see this as an excellent opportunity for us to reinvent the mobile fintech ecosystem for both consumers and merchants in South Africa and we look forward to achieving this by working with Alipay.”

Alipay is owned and operated by the Ant Group, an innovative global technology provider. As of June 30, 2019, Alipay serves more than 1.2 billion users worldwide together with its global e-wallet partners. Guoming Cheng, Head of Global Payment Partnerships at Ant Group, says, “Alipay seeks to work with like-minded partners around the world, to bring innovative and inclusive digital daily life services to consumers and small businesses globally. Vodacom Financial Services’ aim is to better serve customers and merchants in South Africa through digital technology, and we look forward to working with them to achieve this”.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry