Former Telkom CEO Papi Molotsane's Synglo Technologies has bought a 65% stake in value-added network service provider UniNet for an undisclosed sum.
The deal, which was consummated in April after the two parties began discussion late last year, has an ironic twist to it: Telkom, under Molotsane's leadership bitterly opposed UniNet's link up with the Municipality of Knysna to supply a WiFi Internet and voice network that has made the town the first in Africa to be wirelessly connected.
Molotsane was ejected from Telkom last year, having run fowl of the board after he signed the East African Submarine Cable System (Eassy) construction agreement in contravention of the Department of Communication's wishes. He had also come in for heavy criticism of his handling of Telkom and the fact that he was seen then as an outsider to the telecommunications industry.
"UniNet has developed a reputation for being a disruptive company and Papi's buy-in continues that tradition," David Jarvis, UniNet founder says.
In terms of the new deal, the UniNet board will be reconstructed with most of the members coming from Synglo. Jarvis will relinquish his position as CEO, but will remain as an executive director and head up a new research and development division called UniNet Labs.
As part of the restructuring, UniNet will now separate its wholesale and retail businesses, with the former dealing with its relationships with licensed telecommunications operators such as the Knysna municipality, the under-serviced area licensee Amatola Communications and with other value-added network services.
UniNet has made its niche the rollout of low-cost connectivity services to the under-privileged and plans to expand this to about 80 townships across the country. It does this by using a combination of WiFi, WiMAX and LTE systems. It also plans to introduce its own range of handsets that will use the cellular GSM and its own networks to provide low cost connectivity.
The company is currently lobbying the regulator, the Independent Communications Authority of SA (ICASA) for an individual electronic communications network service licence and is bidding for a WiMAX license.
"ICASA's stipulation that companies wanting a WiMAX license must be at least 51% black owned, coincidently works well for us as we now exceed that requirement," Jarvis says.
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