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Huge Group folds network, telecoms units into one firm

Samuel Mungadze
By Samuel Mungadze, Africa editor
Johannesburg, 15 Nov 2022

The board of the JSE-listed Huge Group has approved combining Huge Networks and Huge Telecom into one business.

Huge, which invests in entities that operate in the converging connectivity, cloud, software and x-tech markets, yesterday notified shareholders of the development, saying the business combination is part of its organic growth strategy.

This will underpin significant growth over the medium and longer term, while immediately unlocking significant operational benefits and synergies, it says.

“The combined new entity will leverage the inherent strengths of both companies for growth,” says the firm.

“The business combination will bring together the commercial, go-to-market and distribution capabilities of Huge Telecom with the products, services and technical capabilities of Huge Networks to create a stronger, more capable entity.”

The development follows the company’s recent concerns over the sluggish performance of its investments.

In its financial results for the year ended February, Huge said while it continues to be focused on investments that generate revenues from connectivity, the future will see it diversify.

In the year, Huge Telecom faced tough economic conditions, leading to high customer churn.

Yesterday, in the notice to the market and shareholders, the company detailed the tie-up rationale, saying: “Huge Telecom’s significant national footprint, partner network, regional presence and national technical resources, combined with Huge Networks’ technology leadership and expertise, will greatly enhance the newly-enlarged entity's ability to achieve scale, unlock revenue growth and accelerate the delivery of increased shareholder value. The business combination will immediately yield various operational benefits.”

Huge says the combined entity will be in a position to offer a significantly expanded product and services catalogue to its customers and more than 900 registered business partners.

According to the company, the product and services portfolio includes an “integrated telephony solution (a VOIP service that is integrated into GSM) with dedicated voice transmission and data capabilities that comprise the full spectrum of bearers, including fixed 5G and LTE, carrier-grade fibre services and broadband fibre-to-the-business services.

“In addition, the proposition expands to include data hosting services and platforms, SD-WAN solutions and various security applications.”

Dr Marius Oberholzer, MD of Huge Networks, has been appointed to lead the new entity, and will oversee the tie-up, which will be implemented with immediate effect and should be completed no later than 1 March 2023, coinciding with Huge’s new financial year.

The group notes the newly enlarged entity, with its national operating centre based in Centurion and East London, will have an expanded national presence with offices across the country.

“The newly-enlarged entity will seek to aggressively grow its already substantial combined customer base of more than 19 000 business and SME customers, and will boast a combined turnover (based on historically reported information) of approximately R300 million per annum.”

The reset by Huge comes a few weeks after three directors, including the chairman, dramatically resigned.

The company announced the surprise departure of chairman Duarte da Silva, Dr Craig Lyons and Professor Brian Armstrong.

Huge Group has since appointed Veran Kathan as new independent non-executive chairman, Mike Beamish as non-executive director, and Izak van de Merwe as new chief commercial officer and executive director.