Vodacom South Africa Sale of WBS Stake Near Finality

Vodacom 's sale of its 24.9% stake in Wireless Business Solutions (WBS) - which owns internet service provider iBurst - is near conclusion, with iBurst shareholders expected to buy the stake.
Last month, Vodacom said it would sell its shares in WBS to apply for a spectrum allocation of its own, as its investment in iBurst could prevent it from doing so. Vodacom bought into WBS four years ago to get access to the lucrative and scarce spectrum.
iBurst CEO Thami Mtshali said last week the transaction was yet to be finalised but the shareholders had pre-emptive rights that they would exercise. "The shareholders are bullish about the business (iBurst)," he said. iBurst's shareholders include Mtshali, Brett and Mark Levy, the joint CEOs of JSE-listed Blue Label Telecoms, and Eric and Sydney Ellerine. Mtshali would not comment on the value of the stake.Vodacom and iBurst are expected to continue with their commercial partnership.
iBurst will also apply for more Wimax spectrum allocation as part of its long-term strategy to provide telecommunications services including data and voice to consumers and small and medium enterprises using different technologies.
iBurst is the major earnings contributor in the WBS stable. However, last year the group went through a difficult period that led to retrenchments. Mtshali admitted that the company had had "rough times", but said it had since weathered the storm. "We made a couple of wrong decisions," he said. Such decisions included outsourcing its call centre and changing its billing system. But the billing system was back on track and it plans to manage the call centre internally.
"About 90% of the queries are about billings, not service. This shows that our customers are satisfied with our products and services," he said. WBS would focus on growing its businesses, including its infrastructure subsidiary Broadlink, which was formed three years ago and produces R7m in turnover a month. The target is to grow its turnover to R150m a year from next year.
Mike Brown, the MD of Broadlink, said the company would add new products such as voice and information technology products, including antivirus solutions. The technology products would be sold through partners. "About 700 companies are using our products (infrastructure) and it is only natural to expand our services. We will work with existing partners to offer turnkey solutions," Brown said. iBurst has shelved its listing on the JSE to focus on growing the business. "Our target is to have revenue of R1bn but with high margins," Mtshali said.