19 October 2011
South African company Internet Solutions (IS) has increased its stake in Internet Solutions Kenya from 51% to 80% for an undisclosed sum, with an option to acquire the remaining 20%, as the group looks to expand its east African business interest.
IS, a Dimension Data subsidiary, purchased a 51% stake in the Kenyan internet service provider, then called iConnect, back in 2005.
In a statement this week, IS Kenya MD Loren Bosch said that East Africa was experiencing a boom, with the telecommunications sector playing a vital role in fueling the rapid growth through massive investments in fixed line and wireless infrastructure.
This was largely due to the increased international bandwidth capacity supplied by undersea cable systems including Seacom, EASSy, and TEAMS, of which IS has secured substantial capacity.
Key growth market, East African hub
“Kenya forms the hub of the East African operation, as it is strategically well-placed to serve a number of other key countries such as Tanzania and Uganda,” Bosch said. “This investment will ensure that we have the resources and capabilities to successfully roll out into these key regions and secure sustainable market share.”
Internet Solutions has identified Kenya as a key growth market due to the strength of the local economy and the rapidly increasing data demands in the consumer and corporate markets.
“As greater capacity comes online we are starting to see an increase in the demand for cloud-based services, specifically the delivery of software as a service,” he said.
To meet this demand, IS has made a substantial investment into upgrading its local data centre, to the point where it is currently the only tier 3 data centre in the country.
Paradigm shift toward outsourcing
Kenya is also seeing a paradigm shift in terms of how service providers provision services – local infrastructure providers have historically built out their own infrastructure, but are now increasingly looking toward outsourcing as a means of reducing large-scale capital expenditure and operating costs.
“This has opened up the market by creating a provider-agnostic environment where a good mix of technologies can be delivered,” Bosch said.
As the Kenyan market continues to develop as the innovation hub of East Africa and serve as a springboard into the other important emerging economies in the region, it was important that the company establish a strong presence in the market, he explained
“This increased investment will greatly assist to position IS Kenya at the forefront of the corporate ICT sector and serve the needs of this rapidly growing market.”
Bosch added that Internet Solutions also had plans to roll out into Rwanda and Burundi in the near future, as well as to enter South Sudan.
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