MTN and media group Johnnic Communications have bought first tier Internet service provider (ISP) Citec for R25 million. The sister companies say Citec will fill the gap in their portfolio.
Johnnic says Citec will remain focused on the business marketplace and has no intention of entering the dial-up fray.
Citec was purchased from founder Jason Berry and Iocore (ex-New Africa Holdings) and the deal is effective from April. MTN will hold 60% of the company with Johnnic e-Ventures holding the remaining 40%.
Citec will become the single integrated Internet Protocol network and ISP for all MTN and Johnnic Communication companies, and will continue to provide Internet access and hosting services to existing and new commercial clients.
Johnnic group CEO Paul Edwards says the acquisition is an important positioning move for both MTN and Johncom.
"Firstly, it will provide a cost-effective solution to growing needs within the group for Internet connectivity and services.
"But it also positions the group in terms of the broader market too. We believe the telecommunications costs, both local and international, will reduce as deregulation is introduced in 2002. This will result in corporate SA expanding their networks and their use of the Internet, creating more demand for value-added business services.
"The growth of telecommunications services worldwide is in data, not voice, and South African growth has been held back due to the Telkom monopoly. We are positioning ourselves to be part of this anticipated boom.
"The group is already a strong player in the content, e-commerce and the ASP market, through both MTN and JeV, in particular the I-Net Bridge marketplace. By now providing corporate connectivity as well, we are filling a gap in our portfolio of value-added services," says Edwards.
"We can now offer corporates the full spectrum from connectivity, hosting, serving, application to content."
MTN financial director Rob Nisbet says of the deal: "We are already seeing strong growth of mobile data services provided by MTN. This acquisition moves MTN further up the value chain and enables us to increase value to corporate customers."
All the Johnnic and MTN group IP networks will be integrated into a single Citec network.
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