Johannesburg - Vodacom Group's effort to seek new revenue streams and defend its market share has led the country's largest cellphone group into an alliance with Vodafone, the world's largest cellular operator.
Vodafone will allow Vodacom to market its global services such as Vodafone Live and Vodafone Mobile Connect card.
Vodafone Mobile Connect, which will be marketed first, will allow Vodacom customers to insert a card into their laptops that will enable them to have mobile access to the internet through Vodacom's data network.
The live offering will allow cellphone users to access high-speed data transfer of products like video clips through their cellphones.
The alliance will enable Vodacom to piggy-back on Vodafone's buying power to purchase third generation (3G) technology handsets.
It will also enable Vodafone clients travelling into South Africa to access Vodafone's enhanced roaming services.
Vodacom is planning to launch the 3G technology services and products before Christmas. It wants to lift the 5 percent that data services contribute to the R23.5 billion in revenue that Vodacom made in the year to March.
Alan Knott-Craig, Vodacom's chief executive, said: "We realised that unless we join the Vodafone partnership, it will be pretty difficult to launch 3G technology services."
He said Vodacom alone could not afford to conduct 3G's research and development on a sustainable basis because it was very expensive and "you need to be in a strategic alliance. That was the compelling reason because it cost us money to join the alliance."
He added: "The alliance can enable us to push up our data revenue to between 10 percent and 20 percent over time."
Vodacom will also reduce 3G services prices to be affordable to consumers.
Vodacom will roll out 470 3G base stations in major metropolitan areas, such as certain parts of Bloemfontein, Cape Town, Durban, Pretoria and Johannesburg, at a cost of R400 million before the end of the year.
The company expected to spend another R400 million next year and estimated that it would cost R5 billion to roll out the 3G technology network.
Vodacom is 50 percent owned by fixed-line telephone group Telkom. Vodafone owns 35 percent and VenFin, an investment firm controlled by the Rupert family, holds 15 percent.
Thomas Nowak, Vodafone's director of partner networks, said: "It's a milestone to take our relationship with Vodacom to the next level."
He said the Vodafone partnership strategy enabled the group to combine the strength of local and international branding.
"Our alliance with Vodacom will enable both companies to retain and attract multinational customers," Nowak said.
The partnership with Vodacom was not only about driving data revenue because "we have voice products in the pipeline".