FirstNet, the value-added network services (VANS) subsidiary of First National Bank, has announced that it has been sold to Gateway IP, a telecommunications company based in Britain.
Details of the transaction have not been released.
FirstNet was established in 1991 to carry data traffic for its parent bank. The company now says the majority of its business is no longer linked to First National Bank, although it will still be a major customer.
Gateway IP describes itself as a wholesale provider of communication services using an overlay network to supply cheap international bandwidth. It is privately held. Although it has operations in the Middle East, Asia and Africa, the FirstNet deal is its first major acquisition outside its home territory, with most of its business conducted through partnerships.
"The acquisition of FirstNet represents a key part of our strategy to enter the enterprise market, to develop a significant local presence in Africa, and to position the business to benefit from the longer-term deregulation of the telecommunications sector," says Peter Gbedemah, Gateway IP MD.
FirstNet has described the deal as an expression of confidence in the local VANS industry. Founder and MD Mike van den Bergh, in his role as chairman of the SA VANS Association, has described the industry as under threat of extinction because of crippling regulations. Van den Bergh has acquired a minority interest in FirstNet in a transaction separate from the Gateway IP deal, and believes the new owners will allow geographic expansion.
"In addition to their wide range of global relationships, Gateway IP is already an important player in Africa," he says. "This will enable us to enhance and expand our own service offerings, to the benefit of our many customers who are moving into the region."
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