While Vodafone and Vodacom are throwing blames, the franchise is losing markets

In January 2019, Vodafone blamed its subsidiary Vodacom for revenue slowdown and in the past year, the company has struggled for growth. In place of the 3 percent growth expectation Vodafone had in underlying adjusted core earnings for the full year, the telecommunications company’s licence has been cancelled in Zambia.

After Vodafone reported a seven percent drop in revenue to €12.03 billion in the third quarter of 2018 the franchise has continued to struggle for growth in its key markets — Spain, Italy and South Africa. In May 2019, Vodafone revealed $7.22 billion annual loss and to prevent a further loss and reduce the mounting $25.15 billion debt, the company cut shareholder dividends for the first time.

In 2016, Vodafone’s licenced Afrimax, a telecommunications service provider in sub-Saharan Africa offered customers high-speed 4G data services using the Vodafone Zambia brand. When shareholders’ dividend was cut, Shareholders of Afrimax Holdings were affected and this led to financial distress, and the eventual cancellation of the licence.

According to Zambia’s Communications Authority, “The Zambia Information and Communications Technology Authority has cancelled network and service licences issued to Mobile Broadband Limited trading as Vodafone Zambia Limited. The cancellation is on the grounds that Mobile Broadband Limited has ceased to fulfil the eligibility requirements by not being technically and financially capable of meeting the obligations and terms and conditions of the licence.”

Prior to the licence cancellation, Vodafone had planned to sell the company due to the inability of its shareholders to inject the much-needed capital to revitalize operations. The company had through a business rescue process issued an invitation of bids to take over its operations.

“Mobile Broadband Limited, hereby, invites interested parties to participate in the open-bidding tender for the sale of the company. Interested bidders may obtain further information from the Business Rescue Administrator and inspect the bidding documents at the address given below during office hours, from 9.00 am to 3.00 pm. A complete set of bidding documents may be acquired by interested bidders from September 12, 2019, from 9.00 am to 3.00 pm at the address given below upon payment of a non-refundable fee for the bidding documents in the amount of $760 (or kwacha equivalent). The bids must be duly received by September 27, 2019, at 10.00 am at Lusaka,” read the notice issued by Luwita Sayila, the business rescue administrator.

As at the time of writing, the website of Vodafone Zambia was not available, Zambia was no longer listed on the Vodafone group website and attempts to reach the company proved abortive.