JSE-listed electronics company Jasco is positioned to capitalise on impending telecommunications roll-outs as the industry grapples with implementing liberalisation, it says.
CEO Martin Lotz says the company is seeing increasing interest from agencies involved in establishing networks on the continent. Moreover, as the second national operator (SNO) comes into play in SA, Telkom is spending on its infrastructure, benefiting at least one of the three telecommunications units in Jasco`s stable.
Telecommunications makes up about 60% of Jasco`s earnings profile, with its manufacturing sector and security businesses making up the balance. Of the telecoms businesses, Webb Industries, which operates in the GSM and two-way radio market, is the largest.
Tasslelane, which holds the exclusive distribution rights for 3M telecommunications products in SA, was acquired in 2003. The division has secured long-term supply agreements with Telkom and supplies connectivity products such as connectors, joint enclosures and terminations. Telesciences offers software solutions to large telecommunications operators such as billing and testing software.
Telkom announced in April that it would spend around R30 billion on its fixed-line infrastructure over the next five years. As it increases spend in anticipation of the second network, Jasco is benefiting. Lotz is hopeful the company can also benefit from the second operator.
"It would be great if the SNO comes in here and doesn`t bring a thing in from India."
African ambitions
Following on from Nigeria, countries such as Ghana, Tanzania, Uganda and the Democratic Republic of Congo are investigating mobile communications, says the company.
Lotz says Africa is still underprovided in terms of communications and Nigeria`s successful acceptance of cellular communications is giving impetus to a continental drive. However, he adds that it "would be nice if Africa started spending on its backbone".
In its latest financial results for the year ended February, the telecommunications division saw revenue increase 32.5%, to R192 million. Operating margins moved from 10.7% to 12.2%.
"The increase in revenue and operating profit was achieved through continued strong performances from Webb Industries and improved performances from our acquisitions of three years ago, namely Telesciences and Tasslelane," said the company at the time.
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