Johannesburg, 06 Oct 2014
The national telecoms service provider today announced its intention to expand its network nationally by strategically acquiring non-controlling shares in established and bona-fide wireless ISPs in various parts of South Africa.
While OTEL Telecoms' core service focus is infrastructure, its costs amounts to a large OPEX sum for WISPs. Sharing of certain aspects of the infrastructure, such as its Internet breakout, peering points, network operations centre, and potentially administration, can lower operation costs and free up much of the primary management members time to focus on growth and optimise network performance while increasing profits.
Mohammad Patel, CEO of OTEL Telecoms explains: "We are thrilled to re-enter the M&A space in order to help drive OTEL's strategic growth. OTEL Telecoms has access to plus R150m in investor funding to acquire between 20% and 49% of fast-growing WISPs in areas which fit within our long term business plan. With the lack of infrastructure in the smaller towns, it is in OTEL's interest to provide a combined force to establish a firm foundation for last mile provisioning which will mount up a challenge to other entrant operators in the area."
WISPs are generally wireless radio fanatics who have entered the wireless Internet provisioning space as a hobby. The industry has since grown to an established and organised set of serious players who can stand up to compete with any major operator. While the growth phase has been without formal guidance, organisations such as the Wireless Access Providers' Association (WAPA) plans to change that by providing code of conduct, high-site best practices guideline and regulatory aspects of the industry.
OTEL Telecoms plans to formalise the industry further by establishing a group which will share commercially viable strategic growth plans whilst gearing up to cater for South Africa's growing demand for Internet access in metro and rural areas.
Patel concludes: "Discussions have been ongoing with investors during the year. We've reached the stage where we're ready to engage in negotiations with interested WISPs in targeted areas. While the WISP will retain management control, business plans should be submitted to OTEL Telecoms for funding to expand the network."
More information on OTEL's acquisition plans can be found on www.otelafrica.com
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