Altech's fibre plans
TELECOMS group Altech will selectively lay fixed-line fibre network to target niche markets, such as gated communities and companies.
Altech, which was awarded a network licence in January, bought internet service provider Technology Concept earlier this month. Technology Concept brought 300 corporate clients with it, which will speed up Altech’s plan of building its own network.
Chief executive Craig Venter said yesterday that Altech was not going to spend billions of rands building a national network. “We want to capitilise on niche areas. We will lay fibre in all those corporate clients.”
Altech has maintained 10 years of robust growth, with operating profit for the year to February increasing 32 percent to R874 million. Revenues rose 11 percent to R9.164 billion.
The performance was attributed to the contribution of long-term contracts increasing to 79 percent of revenue.
“Generally, it is perceived that businesses (with long-term contracts) are better protected during difficult economic conditions,” Venter said.
Earnings a share rose 35 percent to R5.69. Adjusted headline earnings a share grew 15 percent to R5.92. Altech had shown 10-year compounded annual earnings growth of 17 percent, said Venter.
More than 17 percent of Altech’s earnings come from outside South Africa. Altech has a presence in 14 countries.
Frost & Sullivan analyst Lindsey McDonald said: “Altech’s wide portfolio of services has been key to sustaining growth in a tough environment. It offers services that are in high demand.”
Despite paying R650 million for 51 percent in east Africa’s Sameer group of companies, and R385 million in capital spending, Altech operations generated about R1 billion in cash for the year to February.
Venter said all businesses in the Altech group had reported pleasing results, with “superb performances” coming from Altech Netstar, Altech Alcom Matomo, Altech East Africa and Altech Autopage.
Altech East Africa made more than R140 million profit.
Frost & Sullivan expects the information communications and technology sector in east Africa to grow at between 15 percent and 20 percent annually for the next three years.
McDonald said it would make sense for the group to look at west Africa. Shares were 2.56 percent weaker at R57 on the JSE yesterday.
Business Report
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