IS sees growth in Kenya

Internet Solutions' Kenyan operation has seen excellent growth, doubling its revenue by the middle of the financial year (in March), it says.

The company also says it is in the final stages of acquiring an Internet service provider (ISP) in Nigeria. Should the deal fall through, Internet Solutions (IS) would still look to set up shop in Nigeria by the end of the year.

This comes amid an executive and senior management reshuffle at the company last week, following the resignation of two key executives.

Africa Services GM Jacques Rautenbach says IS Kenya, in which the locally-based ISP owns 51%, officially began operations in September.

IS Kenya was formed out of IS's acquisition of a Kenyan-based ISP.

Rautenbach would not be drawn on the details of revenue generated by IS Kenya. However, he says IS expects to soon start seeing a return on its investment, which includes R10 million in infrastructure investment.

IS's African operations are expected to account for 10% of the group's revenue by the end of the financial year in October and 12% by the end of next year, he says.

Rautenbach says IS is using Kenya to develop an operating model which it will deploy in other African countries.

He says the acquisition of Interconnect, in Kenya, provided IS with access to a licence allowing the company to run fibre and WiMax networks in that country. In addition to growing its corporate client base, IS has a consumer strategy that will see it provide ADSL and WiMax services in Kenya.

"Basically, we are able to do what we want, but it doesn't mean we'll do all of it."

The Kenyan telecoms licence also allows IS to become a signatory on the Nepad Broadband Infrastructure Network and undersea cable, also known as the East African Submarine Cable System (Eassy), something the ISP was unable to do through its main operations in SA.

"Without the licence, IS would not have been able to be party to the Eassy project."

Rautenbach says Kenya was the natural choice to establish a foothold for its expansion into Africa, as the market was more mature than the other targeted countries, which included Nigeria, Namibia, Botswana, Mozambique, Ghana and Angola.

He says Nigeria, which is punted as a greenfield opportunity, was far too uncertain in terms of regulatory matters. Additionally, IS did not know the market well.

Since then, Dimension Data, which is the holding company of IS, set up shop in Nigeria, providing additional insight into the market.

As a result, IS is making an acquisition in Nigeria, but Rautenbach would not be drawn on details.