Wireless Internet service provider iBurst has set itself the task of more than doubling income in the next year-and-a-half.
CEO Jannie van Zyl says the company completed its restructuring last week and now aims to double its consumer subscriber base. It also wants to take revenue in its recently launched iBurst Business division, which will focus on the small to medium enterprise (SME) market, from 8% to 50% of the company's total income.
Van Zyl would not disclose the company's current turnover as iBurst is not listed, but this could change as a listing on the JSE may be on the cards.
“The whole economy right now doesn't lend itself to a listing.” He explains that to list now would not make sense: the stock market is still recovering from the economic crisis, and the company would rather deliver on its promises of growing revenue before considering listing in the next year.
However, once iBurst has met its targets, it is likely to consider listing on the Johannesburg-based bourse. Van Zyl says a listing is a “strong possibility”. He says either parent company WBS Holdings would list, or it would unbundle iBurst as a separate listed entity. “It depends on how we want to structure the deal closer to the time.”
iBurst's sister company, iBurst Africa, is also heading to the bourse.
Moving on
He says the voluntary process allowed people, who had already been looking at moving on, to do so, while committed staff retained their jobs. “A lot of the people came out and said I want to start my own thing, and I've been dabbling in it.” Van Zyl says these employees could now move on, and have a few months' salary as a buffer.
Van Zyl has been at the helm of the company for four months since taking over from Alan Knott-Craig Jr. He is now focused on stabilising iBurst after the restructuring process, as it impacted staff morale. “Any restructuring is unsettling for a company.”
He says iBurst is launching new business products, such as VOIP, to build up its recently launched iBurst Business segment. The company has also shifted focus to market itself aggressively and attract new customers.
iBurst aims to double its consumer base in the next 18 months, but Van Zyl did not disclose how many consumer clients the company has. It does, however, have about 25 000 SMEs that have signed up for its business offerings.
The new business units should aid the company to grow revenue from corporate customers to the same level as from consumers. At the moment, revenue from corporate clients is 8% of the group's revenue. Van Zyl wants it at 50%.
In addition, adds Van Zyl, the more business clients the company signs up, the better its margins. Corporate customers have many connections in a single place, compared with consumers, who have one line and are dispersed.
Interconnect glee
Van Zyl also believes a VOIP offering will sell well. He says the reduction in interconnect rates means companies like iBurst can be as competitive as least-cost routers.
Previously, notes Van Zyl, least-cost routing companies were able to offer cheaper calls, because they eliminated the interconnect fee by routing all calls to terminate on net.
But, with government stepping in to lower the termination tariff, iBurst hopes to benefit from its carrier-grade VOIP offering. “I think we are standing on the threshold of a whole new VOIP era.”
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