JSE-listed Accord Technologies has become a major supplier to BellSouth Holdings, a Florida, US-based buying department for the US$20-billion telecommunications company`s interests in Brazil, Argentina, Chile, Venezuela, Peru, Ecuador and Nicaragua.
This gives the Johannesburg-based company access to the lucrative South American cellular market and a dollar-based revenue stream.
Through its US-based subsidiary Telecel USA, Accord will supply BellSouth-branded cellular accessories including carkits, chargers, pouches and batteries for distribution in Peru, Chile and Nicaragua.
Latin America has the fastest growing cellular market in the world. Pyramid Research, a leading US-based telecommunications market research organisation predicts that the Latin American cellular phone market will grow from 12-million subscribers in 1997 to more than 40-million in 2002. In South Africa there are currently 2,3-million cellular users.
Accord`s agreement with BellSouth Holdings follows its recent announcement that its Research & Development division is to supply specially-tailored handheld remote gaming devices to a major US gaming organisation - a contract is estimated to be worth US$7-million in its first year.
Accord Technologies CEO Brandon Saldsman says BellSouth - one of the so-called "BabyBells" spun off from the telecommunications giant AT&T in the 1980s - ranks among the largest players in the Latin American cellular market. Its cellular revenues in the region rose 74% last year to US$794-million.
"Accord has targeted South America for its international expansion in the cellular arena because of its growth potential and similarities to the African market. While the Latin American market is considerably larger than South Africa`s, it also suffers from a severely limited fixed telecommunications infrastructure with an estimated 10 phones for every 100 people.
"As a result mobile phones are becoming the de facto standard communications medium - and with a population of around 400-million, the growth potential for cellular phones and cellular accessories in the region is enormous," Saldsman says.
According to Saldsman, the average cellular phone user purchases or replaces at least one cellular accessory each year. "In the developing countries, a cellphone user spends an average of R100 per year on accessories and this market is growing in tandem with the rise in the second-hand cellular phone market," he adds.
"In addition to providing accessories and benefiting from a dollar-based revenue stream, our agreement with BellSouth gives us a foothold in Latin America and an opportunity to introduce other products which have been developed for and proved highly successful in South Africa. An example of this is SA`s prepaid cellular services which, because they are among the most innovative and versatile in the world, have resulted in a boom in local cellular subscribers.
"At the same time, Accord will be well placed to learn from developments in the Latin American market to improve its position in South Africa and Africa," Saldsman concludes.
Editors Note
Accord Technologies was listed on the JSE in June 1998. Through its acquisition of Bulldog Technologies, Accord acquired 100% of Telecal USA, a specialist communication and cellular supplier. This marked Accord`s entry into the international cellular arena.
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