$25 million Acquisition

Vodacom Acquires Smile: Big Wins for Network Coverage and 4G/5G Rollout

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Big news in the Tanzanian telecom scene! Vodacom just swallowed up its smaller rival, Smile Communication, in a strategic move to beef up its network and dominate the 4G/5G race.

The deal, finalized on April 3rd, 2024, saw Vodacom cough up TZS 68.8 billion (roughly $25 million) for Smile. While Smile might not have had a massive subscriber base (just over 13,800 in June 2023), this acquisition is a game-changer for Vodacom.

Here's why Vodacom is smiling all the way to the bank:

• Network Footprint Boost: Smile's 4G network adds valuable coverage areas to Vodacom's existing network.

• Spectrum Bonanza: This deal grants Vodacom access to Smile's low-band and mid-band spectrum frequencies, crucial for robust 4G and future-proofing their 5G rollout.

• Bargain Buy: Let's face it, compared to the hundreds of millions Smile likely spent on licenses, Vodacom got a steal!

Market Landscape

Vodacom's acquisition of Smile further strengthens their position as the leading mobile network provider in Tanzania. As of June 2023, they held a 30% market share with over 19.1 million subscribers, followed closely by Airtel and Tigo. This consolidation could impact competition, but with Smile's network footprint and spectrum added to the mix, Vodacom is well-positioned to deliver faster 4G and pave the way for a smoother 5G rollout.

What about Smile?

Smile was founded in 2009 and began commercial operations in 2013 in Tanzania. Smile's journey hasn't been smooth sailing. They were facing financial difficulties and were on the edge of collapse in 2022. Thankfully, a Saudi investment group, Al Nahla, jumped in and rescued them.

Is the Internet the Key to Unlock Startup Success?

In Tanzania, tech startups are booming, creating a vibrant landscape of innovation. But in this exciting scene, Tanzania seems to be playing catch-up. While Kenya and Nigeria are known for their thriving tech hubs, Tanzania's startup scene appears to be lagging behind.

Let’s Unpack this

The internet penetration is on the rise in Tanzania, it's still far lower compared to neighboring countries. This limited connectivity makes it challenging for startups to reach a wider audience and build successful online ventures.

While the potential is undeniable, critical questions remain:

Does internet access directly translate to startup success?

Many African countries still face a significant digital divide, where a large portion of the population lacks internet access. Can true innovation flourish if it leaves so many behind?

How can we bridge the digital divide? 

Investment in infrastructure and programs to increase digital literacy are crucial.

The key takeaway? While internet access plays a crucial role, it's not the only puzzle piece. Tanzania has the potential to unlock its tech startup potential by addressing various challenges and capitalizing on hidden opportunities.

Big News for EdTech in Tanzania

Sahara Ventures partners with Mastercard Foundation to invest in EdTech companies. By providing specialized support and acceleration to education technology (EdTech) companies, the program aims to:

• Boost EdTech Adoption: Increase the use of innovative educational technologies across Tanzania.

• Reach Underserved Communities: Focus on reaching learners in the most vulnerable communities, ensuring no one is left behind.

• Empower Tanzania's Youth: Equip young Tanzanians with the tools and skills they need to succeed.

The program offers up to USD 70,000 in equity-free funding. Are you a Tanzanian EdTech entrepreneur brimming with ideas to transform education? This Fellowship could be your launchpad.

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