Storm buy 'makes sense`

Kimberly Guest
By Kimberly Guest, ITWeb contributor
Johannesburg, 16 Nov 2007

Vox Telecom investors should not be sidetracked by Storm Telecom`s bottom line performance, says Vox executive chairman Tony van Marken.

He was responding to concerns that the R360 million purchase price for Storm Telecom may be too high.

"In our hands, Storm is worth a lot more than it is on paper. Customer acquisition is expensive and time-consuming. In 10 years, Storm has built up a customer base of 6 000. Even Vodacom is trying to buy its way into the ISP market, in fact we came up against them in this deal," he reveals.

Van Marken also points out that Storm has ploughed a large amount into infrastructure over the last few years.

"We will be able to leverage this investment for the benefit of far more customers. We also intend to significantly reduce headcount, which will improve its profitability. More importantly, we will take out another competitor in the market."

Vox intends to integrate Storm`s telephony customers into its Orion Telecom subsidiary and its Internet customers into DataPro and @lantic.

The acquisition awaits approval from the Competition Commission. At this stage, Van Marken is unaware of any opposition to the deal.

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