M-Web will use Internet Solutions (IS) as its service provider, terminating its six-year relationship with UUNet. The move effectively shifts the balance of power in the Internet service provider sector.
M-Web issued a statement today saying it had signed an agreement with Dimension Data subsidiary, IS, to supply all its Internet connectivity needs for the next three years. The deal was signed on 17 September.
M-Web CEO Kim Reid says he sees the agreement as one of a partnership with IS. "We are very excited about this contract. The move to IS will be seamless for our customers."
The agreement between M-Web and UUNet emerged out of M-Web`s purchase of iAfrica. That deal effectively ended in November 2003, although it was extended on an ad hoc basis.
In terms of that agreement, M-Web serviced the home market, while UUNet targeted the corporate market with leased-line offerings.
"We always had a good relationship with UUNet, but we felt that it would be a better fit with IS," Reid says.
UUNet, owned by US-based MCI, has effectively been without a local CEO since Dave Meintjies left in November last year, and is believed to be one of the considerations that prompted M-Web`s move to IS.
M-Web is SA`s largest premium rate (R150 per month subscription) service provider for the home market with about 448 000 customers. Last month it added another 100 000 customers to its base through the purchase of Tiscali`s South African operations for about R320 million.
Reid says the Tiscali operation uses IS and Telkom-owned SAIX, and M-Web`s basic service Polka.com already uses IS as its supplier.
He says M-Web will offer its clients the services that IS is preparing for, particularly voice over Internet Protocol (VOIP).
"We definitely will capitalise on all of IS`s offerings, especially in the VOIP arena, which they are already prepared for."
Meanwhile, Edwin Thompson, technical and regulatory director at UUNet SA, has said in a statement: "UUNet SA and M-Web have enjoyed a mutually successful relationship for six years and after extensive review, the businesses have decided on an amicable separation.
"While the nature of this disengagement remains confidential, both UUNet SA and M-Web believe this step is appropriate to ensure the successful positioning of both companies."
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