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Intel arm invests $5m in Altech

Nicola Mawson
By Nicola Mawson, Contributor.
Johannesburg, 24 Jun 2011

Global chipmaker Intel will invest $5 million, or R34.3 million, in JSE-listed Allied Technologies (Altech), in a bid to explore collaboration opportunities in the telecoms, multimedia and IT sectors in Africa.

Intel's investment is in the form of a loan that can be swapped for shares in Altech after the first year. It is being made through its global investment organisation, Intel Capital, and marks Intel Capital's first venture into SA.

Altech's corporate finance director, Peter Curle, says “the $5 million will be used for research and development into technologies that will take advantage of telecommunication services” in Africa. Altech has operations in East Africa, West Africa, SA, Mauritius, Europe and Australia.

Altech CEO Craig Venter notes the investment is evidence of new market opportunities that are emerging as large-scale broadband communications infrastructure becomes available in SA, West Africa and East Africa.

“This investment is part of an ongoing strategic engagement to explore various areas of collaboration within the telecommunications, multimedia and IT sector across Africa, and we look forward to working with Intel Capital in developing communication services in the region,” says Venter.

He says connectivity is a key driver for growth in Africa, and increasing broadband penetration has a direct impact on gross domestic product gains.

“Aligned to this, the migration to digital terrestrial television will be a stimulant for SA and the region's telecommunication strategy - that of encouraging innovation, the development of local IP, and the resultant creation of more employment, which is all linked to increased growth of the economies of these countries,” Venter adds.

Seeking opportunities

Intel Capital president and Intel executive VP Arvind Sodhani says the group is “actively seeking additional opportunities to invest in technology companies in emerging nations”. He adds Intel Capital strives to “foster technology innovation globally and stimulate economic activity on the African continent”.

Sodhani points out the expansion into SA takes the company into its 50th country. “Intel Capital is excited to have our team in SA complete our first investment in the country.”

Intel has been trading in sub-Saharan Africa for more than 12 years, with offices in SA, Kenya and Nigeria. The venture, which gives Intel Capital a financial interest in Altech, is subject to Altech shareholders' approval.

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