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Seizing the opportunities, mitigating the risks
We have identified four significant trends that have a material impact on our
business model. Our Vision 2020 strategy has been developed to ensure that
we are best positioned to seize the opportunities and mitigate the risks
associated with each of these trends.
Our operating environment
Source: GSMA Intelligence, The mobile economy 2018
IoT
7.5
bn
2017
25.1
bn
2025
Total connections
Source: GSMA Intelligence, The mobile economy 2018
2017
43
%
2025
61
%
Penetration rate
(% of the population)
3.3
bn
2017
2025
5.0
bn
Mobile
internet users
A changing competitive landscape
g
g
The telecommunications and mobile sector continues
to be increasingly competitive, including non-traditional
new sources.
g
g
In our countries of operation there are typically two to five
mobile network operators (MNOs), each of which is seeking
strong competitive differentiation, through capital investment
in networks, sometimes an aggressive price play, enhancing
the customer experience for targeted segments, and/or
developing new digital offerings.
g
g
Over-the-top (OTT) services are prevalent in all markets.
They have the effect of driving up data revenue, but also
affect services such as messaging and voice which substitutes
revenue from these traditional services.
g
g
As we move towards being a digital enterprise, we are facing
greater competition for new customers and employees from
various non-traditional sources. These include new competitors,
and potential collaborators, in the provision of technology,
networks and infrastructure, and in the development and
distribution of new digital products and services.
g
g
As we provide content services we will be competing and
collaborating with new competitors in entertainment, gaming
and music services.
This growing competition, sometimes from unexpected
sources, underlines the importance of ensuring that we
are fast and flexible. Our Vision 2020 strategy aims to
harness digital to drive clear competitive differentiation
identifying opportunities for innovation, ensuring that we
proactively deliver the best customer experience, and
instilling an Agile culture across the organisation. In many
instances, we are identifying innovative opportunities for
collaboration and partnership for mutual benefit, rather
than traditional competition.
Implications for our strategy
The ‘Fourth Industrial Revolution’
– reshaping businessmodels
g
g
Developments in Artificial Intelligence, Big Data analytics and
blockchain technology – accompanied by the growth in
connected homes, autonomous vehicles, smart cities and the
Internet of Things (IoT) – are disrupting traditional business
models, presenting a major source of business risk, as well as
new opportunities for value creation.
g
g
Digitally connected consumers are becoming more activist
customers, increasing their use of data and expecting
highly-personalised interactions, while at the same time
becoming very protective of data privacy.
g
g
Together, changing digital technologies and consumer
expectations are transforming business sectors and
challenging many traditional business assumptions; the
digitisation of many industry sectors presents significant
opportunities in particular for ICT companies.
g
g
In the mobile sector, the fastest growth area is in data, driven
by increasing uptake of smart devices, improved networks,
connected devices and the increased availability of data
content. The greatest demand for mobile services is coming
from emerging markets, where there is a young population
base, higher economic growth, less fixed-line infrastructure,
and significant further scope for mobile penetration.
Our Vision 2020 – and our various strategic big bets –
positions Vodacom to be a leading digital company, realising
the substantial opportunities beyond our traditional revenue
streams. We are rethinking our future networks and
technology, redefining customer engagement, developing a
company culture that attracts the best digital talent, and
exploring innovative opportunities to drive positive social
change in financial services, Enterprise, education,
healthcare and agriculture.
Implications for our strategy
IoT
12
Vodacom Group Limited
Integrated report for the year ended 31 March 2018