ITWeb: HIX shares are opening today at 50c with a PE of 15. What are your expectations?
Mazabow: We've had a lot of exciting episodes in our 10-year existence and this is a natural progression of where we've come from. What I'm looking to is not the listing itself, but after the listing - working out how the puzzle works and building it successfully so it paints a pretty nice picture. That's the key to it - it's the beginning of a whole new business career.
ITWeb: You have raised R6 million in the pre-listing placement?
Mazabow: The interest from the financial institutions was tremendous - if we would have gone to raise 10 times that, we would have come away with it just as easily. But we wanted them to understand our business and believe in it more than just to make X amount. We want them to be with us for a while.
ITWeb: The company you are listing is very different from the original distribution business?
Mazabow: We are coming from distribution, which really is a training-ground for entrepreneurial and creative flare. But what makes one distributor different from another is service and a plethora of value-adds. To translate this into the Internet or virtual private network (VPN) field is very challenging. We will take those distribution techniques and the skills that we have built up and move them into our area of focus - wide area communications, voice, data, convergence of all the technologies.
ITWeb: It must be challenging to change an established perception in the marketplace?
Mazabow: The set of people we are targeting now is completely different. It's a new educational and PR process. And whether you were in distribution before or you were flying aircraft is irrelevant. It's based on what you are going to do, not on what you have done. But it makes me a lot more confident that I know how to build a company and keep it together.
ITWeb: There is lots of hype around VPNs. How do you intend to set yourself apart from the VPN crowd?
Mazabow: It is important to differentiate between Internet and managed or quality of service VPNs. In SA, where your main line is 64K and expensive, an Internet VPN is not an answer. You can't use brute force; you can't pump that 64K line. You've got to build a separate network, and that's what we have done. We have built a Frame Relay-based network with all the redundancy. Any ISP can wake up and declare itself a VPN, but it's unreliable, and it's not secure. And how do you commit to service on that? I cannot guarantee service on an Internet network. With the Frame Relay-based network, I can guarantee whatever you want, whenever you want, for whatever application.
So there's a clear distinction between companies that are using VPN as a hype value, versus companies like us that have built something. There are really only two true VPNs in the country, the rest use the Internet as a carrier, but I don't think it is a successful model. The barrier to entry to build a VPN like ours is very high. Our Internet customers have become VPN customers, and our VPN customers will become telecomm customers.
ITWeb: What is your strategy for entry into telecomms?
Mazabow: Service providers will become the next generation of telecomm carriers. We are carrying data traffic across our network. After 27 May 2002 [date set for the deregulation of telecomms in SA], it would become obvious for us to carry international traffic. Companies are starting to carry voice on the VPN within their corporate backbone. So really, we are becoming a telecomms player; it's not something we are forcing ourselves into. Just by virtue of being a service provider we'll have telecomms offerings that will expand as the year 2002 nears.
ITWeb: How significant is your joint venture with Sakon?
Mazabow: Sakon has deployed 10 000 rural satellite telephony systems in Indonesia and is establishing a global voice network in developing countries. We have partnered with Sakon to have access to that satellite technology, while it gets access to our customers who are on a global expansion trail. It has a telecomm network that we would like to switch into when time and licensing conditions permit. We are getting the foundation, starting the footwork now so that we are not two years behind when the day comes.
ITWeb: What are your investment priorities?
Mazabow: Priority number one is the expansion of our network. Then, at this stage we have more work than we can cope with and we have to look at small companies that have network integration and router skills. If they do present themselves, we need to have a cookie jar for that.
ITWeb: What is your personal focus from a management point of view?
Mazabow: My passion and my love is to look at what's coming and where it will fit in with what we are doing. There are plenty more like me in the industry. SA was the 14th most connected country and we are now 26th. If the regulatory environment hadn't restricted people like myself, we would have been among the 10 most connected countries. People like myself could have further developed the connectivity, because we understand it and have a passion for it. Now I have a good investor base and access to the most wonderful technology - my thing is to tell my chefs about these new recipes, and they must go out and cook it.
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