Newcomer Amitelo looks to enter telecoms and internet markets through acquisitions

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International telcoms and internet carrier Amitelo Communications is less than a year old but has ambitious plans in Africa. Launched by Tunisian-German Khalid Akid it is going down the acquisition route with a successful purchase in Morocco and two others planned in Ghana and Senegal. It has an eclectic strategy which includes wireless broadband; carrying VOIP traffic for incumbents and acquiring existing GSM licencees.

A Tunisian-German, Khalid Akid, CEO of Amitelo Communications worked for 6 years for a German carrier, GNT as Vice-President, Business Development for the EMEA region. While doing this job he realised that there was a gap in the market in Africa and the Middle. So last June he decided to leave GNT and to set up his own company to meet this demand.

Amitelo Communications Inc has been set up to be an international telecommunications and internet service provider. Registered in Florida, the company was originally called Plastigone Technologies and the current owners bought the company to set up Amitelo. The company has 30 million shares issued and outstanding, 66% of which are owned by the management team. At present the company is raising further investment for expansion purposes.

The company operates from southern Spain in a Costa del Sol Technopark and this is where its VOIP gateway is located and it has plans to build a POP in Frankfurt to deal with the voice and internet traffic it is generating. It is going to offer broadband services by satellite, using Astra and Eutelsat.

In January it signed a letter of intent to acquire GNT Global Network Telephone GmbH. GNT is a German telecommunications operator and an international carrier. The company has revenues of approximately USD28 million US for 2003 and anticipated revenue of USD37 million US for 2004. GNT’s assets are valued at approximately USD16 million US.

GNT is a national German Telecommunications Operator and an international Carrier, owning a European and International Network with worldwide coverage: Europe, USA, Africa and the Middle East. The company has offices in Celle (near Hanover), Frankfurt, London, Milan, New York, Casablanca, Lome, and Beirut. The company has more than 60 Carriers’ Interconnects in Frankfurt, 35 Carriers’ Interconnects in London, 15 Interconnects in Milan and over 30 Carriers’ Interconnects in New York. The company has carried over its own international Network a total of approximately 1 billion switched minutes of international traffic per annum, 35% of which is purely based on VoIP.

The company’s other expansion plans are quite eclectic. It has plans to build a wireless network on the Costa del Sol to meet demand from expats and tourists. In Africa, it has started by purchasing a local provider in Morocco called Success Technologies. This first local subsidiary will act as HQ for its African operations. Founded in 2001, Success Technology recorded revenues of approximately USD500,000 for 2003 and anticipates revenues of two million dollars for financial year 2004. The company’s client roster that includes Kraft Foods, the Gillette Company, Ernst & Young and many Moroccan ministries and government bodies.

It wants to establish direct VOIP routes to all West African countries and has an initial agreement with Togo Telecom. The selling point to the incumbent telcos is that by going through Amitelo they can begin to compete with grey market operators. As Akid puts it:"In Mali for example there are ten local companies offering VOIP on the grey market which is about 10-20% of the total international traffic. We’re looking to offer the incumbent cheaper VOIP-based calling that will help them get back this traffic."

"Amitelo is currently speaking to several non-privatized PTTs in West and Central Africa about forming joint venture companies with a role of ameliorating and improving the PTT’s services prior to privatisation. It will allow them to introduce the newest technologies and introduce new services like DSL, VOIP calling cards and others. This will help improve the image of the PTT and prepare the operator for the liberalization of the market."

In Ghana, it is looking at acquiring a data licence through direct acquisition of what it describes as a "broadband operator". If this acquisition is successful it will become Amitelo Ghana and it is also looking to set up Amitelo Senegal. Wireless local loop is very much part of its agenda.

It would also like to acquire GSM networks:"I spent 6 years in Africa negotiating deals with telcos and Ministries. A number of those who have been awarded GSM licences have contacted me. We’re looking at Ivory Coast, Sierre Leone plus a couple of other countries."

Can such a broad strategy work? It all depends on whether Amitelo has the purse to build up a portfolio of companies and can generate enough traffic both ways to offer incumbents attractive offers.