A cut above the rest
A GROUP OF FORMER Dimension Data executives – including co-founder Richard Came – and former Public Enterprises director-general Eugene Mokeyane, who project managed the listing of Telkom, have put together an empowered investment company and positioned it in what should soon be a market sweet spot of telecommunications infrastructure.
One of its interests is a 49% stake in Muvoni Weltex, an oddly named company that’s busy digging up the roads between Sandton and Rosebank, north of Johannesburg, laying fibre optic cable for soon-to-be Telkom competitor Neotel. It will soon do the same for at least one of South Africa’s two major mobile operators.
Came, who left Didata in 2003, says there’s far greater demand for fibre optic in SA than the capacity to deliver it. It’s billing Muvoni Weltex’s unique Cleanfast fibre laying machines as a “breakthrough” in helping solve SA’s bandwidth issues ahead of 2010.
Came says the lack of alternate infrastructure providers has been a contributor to this country’s high telecoms costs, but with a number of operators soon to be competing in the fibre backhaul market there should be a positive impact on pricing.
While MTN has started laying trial links between Sandton and Rosebank, Vodacom has also announced its intention to investigate providing its own links between its base stations. Telkom is also expanding its network and said at its full-year results to March that it had already increased the use of fibre in its network by 88,7%. Anyone driving around Jo’burg will have noticed the digging, some being more obtrusive than others.
The investment company that’s bought into Muvoni Weltex is called Community Investment Ventures (CIV) and is 44,1% owned by its founders, including Came, Nicolaas Venter, Gustav Smit, Chris Basson and Lars Schonken, through their Rockit Fund, 37,3% by Mokeyane’s New Gx Capital and 18,6% by Anna Mokgokong and Joe Madungandaba’s Community Investment Holdings (which has health, power and telecoms investments, among those a stake in JSE-listed Jasco).
Came, a Roosevelt High School boy like Didata chairman and another co-founder Doc Watson, was responsible for group marketing and strategy before his departure. Didata was founded in 1983 and listed on the JSE in 1987 and in London in 2000.Came said at his departure that he was moving on to explore new opportunities.
Came says CIV had bought an initial 49% stake in Muvoni Weltex but could increase that over the next few months to help it raise capital to expand. The company currently owns one specialist fibre-laying machine but another six are on order from France. However, the manufacturer is itself struggling to meet demand, as it services the world market, Came says. Each machine costs roughly R6m.
Instead of digging up roads manually to lay cable at a snail’s pace of 100m/day the Cleanfast machine digs a small trench – roughly 40cm deep and 15cm wide – lays the cable and restores the road surface. It can cut 1km in a single day.
The Neotel project, its first major contract, began three months ago and involves laying roughly 14km of cable from William Nicol Drive along Sandton Drive, up Fredman Drive into Rivonia Road and on to Rosebank. It’s scheduled to start on a large contract with the newly signed-up mobile operator in September.
Came says the most significant cost of a fibre optic network isn’t the cable itself but laying it. Complexities include digging up roads and people’s driveways – giving local authorities the headache of managing that.
However, Came says Muvoni Weltex is able to greatly reduce the time, complexity and disruptive nature of that process. Significantly, it could also safely lay one cable next to another should various operators all decide to lay their own in high density areas, such as Sandton and Rosebank.
Came says all the investments in the CIV portfolio are aimed at building telecoms infrastructure. Others include CZ Electronics, Dotcom and MCT.
In power and energy, CIV also invests in a number of companies, including Clear Line, Ferrites and Enervate.
Finweek
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