Can an Internet service provider outsource its clients? Apparently, because that is what Club Internet, the ITI Technology Holdings company, says it has done. The 20 000-odd active Club Internet dial-up users will be taken over by M-Web, without a cent changing hands.
On the surface, the deal would seem a simple acquisition. M-Web will take over the Club Internet infrastructure and it will absorb all staff employed by the company. Francois le Roux, ITI group financial director, says ITI will "never touch the consumers", not even billing them. Yet ITI will still own the consumers. M-Web will have the right to treat the subscribers as its own, after which it has the option to extend the agreement.
No money was paid upfront, but ITI will be paid a percentage of the revenue derived from its chattel.
ITI, like USKO and the Internet Solution before it, wants to be free to concentrate on corporate clients and background services, and seems more than glad to give its consumers over to M-Web. But why not an outright sale? Two reasons, Le Roux says. "We spent a lot of money branding the name, for one."
As the users will maintain their e-mail and domain names, that branding stands in place. But more importantly, "we didn`t want to seem to be abandoning our customers". That is not purely sentimental, as Le Roux says many of the corporate clients it does business with have personal accounts with Club Internet.
ITI is upfront about the fact that users will receive better service from the consumer-focused M-Web. CEO Gerrie Coetzee is quoted in a release as saying that Club Internet customers will enjoy additional value for money from the arrangement. Club Internet will also not conceal the arrangement behind its own image. It will stock the M-Web Big Black Box in future and sell these on a commission basis.
M-Web is understandably gratified by the deal, having seen the Global Internet Access and Icon dial-up users sold to competitor Yebo!net. "From a business perspective, this is a very positive agreement, accelerating our progress toward critical mass," says M-Web Holdings CEO Antonie Roux.
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