AFRICA ONLINE SETS NEW STRATEGY
Africa Online, the pioneering pan-African Internet service provider, may finally get to live up to its big name. The company's chief executive, Mr John Joseph, publicly unveiled an ambitious $10 million (Sh700 million) plan to roll out to 31 more African countries in the next one year.
This follows the acquisition of the ISP in late February by Telkom South Africa from the Africa Lakes Corporation for Sh1.4 billion (20.1 million). AfOL currently has about 15,000 subscribers in eight countries. Telkom SA has affiliates in 20 countries that resell their corporate connectivity services.
Joseph said the firm would have a new "five-pronged investment approach" in its operations. New investments, he said, shall be focussed on brand development, creation and development of customer channels, improvement of network systems, market expansion and human resource development.
The firm also intends to target multinational and global operators and service providers that require network solutions across Africa.
Part of the money for the expansion will be provided centrally while the rest is likely to be raised from local capital markets in countries of operation. AfOL currently has operations in eight African countries: Kenya, Uganda, Tanzania, Cote d'Ivoire, Ghana, Swaziland, Namibia and Zimbabwe. Its holding company is domiciled in Mauritius for tax purposes. The current expansion drive will see the firm establish a foothold in 39 African countries, mainly through acquisitions and affiliates.
Meanwhile, Telkom SA is planning to bid for the country's Second National Operator (SNO) licence, Joseph has revealed. The intended bid is part of the South African telecommunications giant expansion strategy that targets new acquisitions in Algeria, Ghana, Kenya, Uganda, Botswana, DR Congo and Angola.
AfOL was founded in 1996 as a fully fledged Internet Service Provider (ISP) and currently offers dial up, lease line, Vsat and broadband based services to both its retail and corporate clients. The firm is headquartered in Nairobi and has over 300 staff spread across its operation units in Africa.
Joseph, a former Telkom SA marketing executive, also outlined plans to invest in at least seven more base stations in Kenya, the group's flagship operation. The firm currently has four base stations in Nairobi and one in Mombasa. The Kenyan operation generates the group's highest revenue and has 80 staff in Nairobi, Coast and the Western region. It has an active subscriber base of about 5,000 dial-up clients and over 2,000 broadband services subscribers.
Joseph welcomed the ongoing Government initiatives to link Kenya to the international network through undersea fibre optic cables, saying that this is bound to increase available bandwidth and lower connection costs.
He predicted that AfOL Kenya will continue to be a profitable business and cited recent Communications Commission of Kenya (CCK) projections that show that Internet users are likely to double in the next five years. Joseph further revealed that Telkom South Africa is on the look out for any new business opportunities in the targeted countries having recently concluded two new acquisitions.
These include the ongoing BCX Company (South Africa) acquisition of 100 per cent equity at $339 million, the Africa Online Group acquisition at $20.1 million and the acqusition of 75 per cent stake in Multi-Links at $280 million.
The East African Standard