Johannesburg, 06 Jun 2008
Internet Solutions (IS) plans to bid for Naspers` wholly-owned Internet service provider, MWeb, when the company goes up for auction.
This follows Naspers` announcement on Monday that it plans to sell the company due to diverging strategies. Naspers also said it had received numerous offers for MWeb.
It made no further disclosures about the dates and logistics of the auction. However, MWeb CEO Rudi Jansen said it expected the transaction to take place within nine months, depending on the interests of the various parties involved.
IS CEO Angus McRobert says one of MWeb`s key attractions is its "exciting broadband base".
MWeb is one SA`s largest residential Internet service providers (ISPs), with over 350 000 dial-up and broadband customers in both the home and business markets.
It also has an extensive footprint in Africa and owns the largest VSAT corporate Internet base in sub-Saharan Africa. "We look forward to build on that," he says.
Vox Telecom chairman Tony Vermaken says, while the company is interested in acquiring MWeb, the price will be a factor.
"Vox Telecom is the third-largest consumer ISP in the country through @tlantic Internet, so MWeb is a good fit. But the financials have to stack up and the valuation has to be reasonable enough to enhance shareholder value," he says.
McRobert notes that an auction would not necessarily push the final price to exorbitant levels.
An auction allows bidders to include a number of out-clauses in their bids, which allow them to get out of the deal if sale conditions do meet acceptable risk levels, he says. This tends to help drive prices down, he adds.
Speculation
Neotel PR manager Zinhle Modiselle says the company has had no discussions with Naspers about MWeb.
Neotel is interested in forming strong partnerships to expand its infrastructure and operations; however, at this stage, the possible acquisition of MWeb by Neotel is pure speculation, Modiselle notes.
MTN and Vodacom had not responded to ITWeb`s query at the time of publication. Analysts previously noted that MWeb would add to the mobile operators` subscriber base and enhance their infrastructure.
New era dawns
World Wide Worx MD Arthur Goldstuck notes that the MWeb sale is the fifth major signal that the Internet space will change in a major way in the next five years.
The announcement of the Seacom cable was the first, Vodacom`s ISP was the second, government`s Infraco cable was the third, and the generous data bundles Neotel recently unveiled was the fourth, he says.
The momentum that we are now seeing in the connectivity space is massive, and the consumer will benefit hugely in the long-term, he says.
In the immediate short-term, though, it will be a story of great frustration as new offerings and alliances are bedded down, he adds.
Related story:
Naspers to auction MWeb
Seacom geared to go
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