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MTN buyout of Afrihost indicative of continuing convergence

3rd June 2014

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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Mobile operator MTN’s buyout of 50% of Internet service provider (ISP) Afrihost for an undisclosed amount was not a surprise for the partners of two years, Frost & Sullivan Information and Communication Technologies (ICT) business unit senior industry analyst Joanita Roos said on Tuesday.

The acquisition, one of many currently under way industrywide, would enable South Africa’s second-largest mobile operator to accelerate the shift from being predominantly a mobile operator to becoming an end-to-end integrated technology solutions provider in a “new world” of business, she added.

The tie-up with Afrihost would enable MTN to better serve its enterprise and consumer markets, expand its enterprise broadband offerings and services to the small and medium-sized enterprise market and leverage Afrihost’s competitive pricing and value proposition, she explained.

Afrihost's move onto the MTN network in late 2012 had enabled an Internet network capacity expansion from 6 Gb/s to the current 13 Gb/s through a partnership that enabled a fully deployed network upgrade to deliver a much-improved service, greater bandwidth capacity nationally and improved international service on multiple overseas cables.

“MTN continues to expand its integrated ICT business and has also partnered with PriceCheck to launch a co-branded mobile application … [which] will enable customers to compare product and service prices, access product reviews, store details and a barcode scanner to check prices,” Roos noted.

The deal, which remained subject to approval by the competition authorities, followed a series of consolidations in the ICT sector, Roos said, citing Vodacom’s imminent takeover of Neotel in May and Telkom’s bid for BCX.

Edited by Creamer Media Reporter

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