UUNet South Africa and Africa Online have announced a joint venture (JV) which will operate Internet access services throughout Africa.
The JV company, UUNet Africa, will be equally owned and is to be capitalised to the tune of $18 million (R140 million). "That is what we estimate will be needed to develop the business and put everything in place," says UUNet SA director David Meintjes.
Africa Online will transfer its corporate operations in eight countries, Kenya, Uganda, Tanzania, Swaziland, Zimbabwe, Zambia, Ghana and Cote d`Iviore, to UUNet Africa, and the company says it plans to roll-out services in six more countries within the next 12 months. The transfer will see around 650 corporate clients, 65 employees and existing network infrastructure change hands.
UUNet`s operations in SA, Namibia and Botswana will not form part of the deal.
UUNet and Africa Online have also signed a 10-year network service agreement, which will see Africa Online operate its dial-up business on infrastructure supplied by UUNet.
"This allows us to focus on our one-to-one dial-up business," says Africa Online corporate communications manager Sam Nganga. "And using UUNet infrastructure should allow us to provide better service to our customers."
Nganga says the deal also allows the JV to offer easy connectivity packages to multi-national corporations.
"The grand vision of Africa Online is to one day cover the whole of the continent, although not necessarily by having operations on the ground everywhere," he says. As UUNet Africa expands its coverage, Africa Online expects to also expand its dial-up business.
Africa Online regional MD for Southern Africa, Richard Beddow, has been appointed as chief operating officer of UUNet Africa, and says the company has the opportunity to significantly improve network infrastructure on the continent.
"We plan to deploy Africa`s first satellite-based IP backbone," he says. "This will span the entire continent and deliver significant improvements in reliability, routing and traffic flow."
UUNet SA`s Meintjes expects the new business to be equally as successful as operations in Namibia and Botswana.
"The markets in central Africa are very similar to the other three countries we operate in, in terms of profitability. It has the same level of attractiveness for us."
Although the deal is subject to regulatory and Reserve Bank approval, Meintjes says the sale of Datatec`s stake in UUNet SA to WorldCom, the UUNet international parent company, will not have any impact.
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