If the share price performance of www.google.com, the world`s most successful Internet search engine - and one of the most illustrious Internet businesses - is anything to go by, then the telecommunications industry and the ICT sector in general are heading for more buoyant times, said James Herbst, Director: Finance of AltX-listed DataPro, the telecommunications company and premier ISP.
"Google`s share price is basically more than 70% higher since its listing on 18 August. The listing has also made billionaires out of the company`s two founders, Sergey Brin and Larry Page. Many people thought that making this kind of wealth out of an Internet stock was a thing of the past since the dot-com bust at the turn of the century. But it certainly looks like good signs are beginning to surface in the technology market again. There is not so much gloom."
But he believes that time has started to heal the wounds of the dot-com collapse of 2000. "It is interesting to note," Herbst said, "that some of the most watched - and most successful - IPOs this year have come from traditional IT businesses, and not just the Google listing.
"What has changed, however, is that companies realise that they have to offer the market some substance. The `vapourware` days of the 1990s when any dot-com stock could list amid a fanfare, even if it had very little substance - and, in reality, not much chance of making any real money - have long gone.
Internet companies now have to be established in their market space and must be making revenue, or at least must be showing an upwards trend. Moreover, you don`t really see CEOs in their early 20s or late 20s at the helm of these companies - executives are older. I doubt we will again see the gee-whiz days of the dot-com market that blazoned across stock exchanges around the world in the late 1990s; but we are definitely seeing more interest."
Commenting further, Herbst said besides the apparent re-bounding of some leading tech stocks, the government`s announcement during September about the big-bang deregulation of the local telecommunications market has created "a lot of excitement in the industry and business in general".
"Companies - certainly in the ISP and telecommunications space - have eagerly awaited this announcement for a long time as Telkom`s monopoly was restricting our ability to compete in the digital arena. This announcement, regardless of the SNO and whether this will materialise, is very good for business. The market we used to operate in - essentially the ISP space - has increased 30-fold and this opens up massive opportunities for IT and telecoms players.
The crux here is: how to maximise these opportunities best. "The winners of this race will be those companies that take advantage of the deregulation fastest and use their speed to market to capture a big slice of this R30 billion per annum market."
Herbst said the telecommunications market in SA is going to be one of the fastest growing sectors during the next five years.
"We believe we have timed our listing on the stock exchange perfectly. We will be ready and waiting to make inroads into the VOIP market when it becomes legal on 1 February next year and anticipate huge growth spurts in our business, for which we are preparing now. I believe the buoyancy in the local telecommunications market, once it picks up, is going to out-shine any other telecommunications sectors in the world. It will calm down once the deregulation dust settles and the rats and mice have been sorted out; but those companies that are in a position to offer products and services that businesses and consumers need are going to be able to grow their market cap substantially."
DataPro listed on AltX on 18 October with a market capitalisation of R125 million.
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