Telkom’s $63m African expansion

12 November 2008

South African telecommunications company Telkom is to acquire the whole of Mweb Africa and 75% of Mweb Namibia from Multichoice Africa and MIH Holdings – both Naspers group companies – respectively, for US$63-million (about R646.8-million), as part of its strategy to expand outside South Africa.

Telkom CEO Reuben September said the transaction would give further impetus to the company’s strategy of becoming a pan-African integrated service provider.

“Expanding beyond the borders of South Africa provides Telkom with an opportunity to become less dependent on domestic revenue streams,” September said in a statement this week.

Mweb Africa

Mweb Africa is an internet service provider in sub-Saharan Africa, excluding South Africa, and also provides network access services in some countries. It is headquartered in Mauritius, with operations in Nigeria, Kenya, Tanzania, Uganda and Zimbabwe, an agency arrangement in Botswana, and distributors in 26 sub-Saharan countries.

Although the company’s operations are largely focused on corporate customers, Mweb Africa’s predominantly satellite-based internet access offerings allows the company to reach a wide range of customers, many of whom are not reached by traditional fixed-line infrastructure.

African expansion

In February last year, Telkom acquired Africa Online, an internet service provider active in Cote d’Ivoire, Ghana, Kenya, Namibia, Swaziland, Tanzania, Uganda and Zimbabwe, for £10.32-million.

In May the same year, Telkom acquired 75% of Nigerian-based Multi-Links Telecommunications for $280-million, giving the company a strong foothold in the Nigerian telecoms market, as well as providing it with a springboard for expansion into West Africa.

“This acquisition, together with Telkom’s investment in Africa Online, is expected to increase the value proposition of our product and service offerings to all customer segments in Sub-Saharan Africa,” September said.

“Telkom’s position as partner of choice for connectivity and related services in Africa is expected to be strengthened.”

The transaction is subject to several conditions, including regulatory approvals being obtained in certain African jurisdictions.

SAinfo reporter

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