CEO Craig Venter is pleased that his company has grown headline earnings and dividends at 20% pa compound for the past ten years.<\/p>\n
But it is agitating to get “Altech Stream”, based on the Wimax 802 standard, to bring fast wireless internet to customers and bacon home for shareholders. The system has been successfully tested in Gauteng.<\/p>\n
Venter believes Wimax will emerge dominant but a whole lot needs to happen. The undersea cable connecting SA to the world is bogged down in politics. We also need a much bigger and better domestic fibre optic network. And then Icasa has to stop protecting Telkom (JSE:TKG) by liberalising the whole telecomm, multimedia and IT business.<\/p>\n
Altech has an advantage in the broadband business in having more than 1,5m customers in Autopage and Netstar.<\/p>\n
Altech is suing Icasa in the High Court for failing to observe the Electronic Communications Act, which is clear on processes for each of the businesses it controls.<\/p>\n
Said Venter: “The lawsuit is proceeding out of principal. The policy needs to be transparent, open and without flaws. We think the process by which they are issuing broadband licences is flawed. We don’t believe Icasa followed the new Act.”<\/p>\n
In acquiring control of Kenya’s Sameer group for R600m cash, Altech seems to signal that TMT growth there might happen quicker.<\/p>\n
This company, developed by the family of Mashaud Merali, is the largest data operator in central and east Africa. It already has 1 500km of fibre optic cable in the ground. It fits Altech like a glove.<\/p>\n
This acquisition, together with a 20% dividend that will cost R250m will reduce cash in the bank from the published R1,5bn to some R500m. Meantime Autopage and Altech Netstar continue to throw cash strongly.<\/p>\n
Altech Netstar grew its fleet management business by 70% last year, partly through the acquisition of Comtech. It is thus a strong competitor to market leader Digicore. Venter estimates that Digicore (JSE:DGC) has 80% of the market<\/p>\n
With its latest results Altech achieved an operating margin of just over 8%, which is more or less consistent. Venter believes the margin can be improved through cost cutting.<\/p>\n
Venter said Autopage is a strong business with a gross margin of about 27% partly because it is independent and it is therefore not on its knees to a single network operator.<\/p>\n
Craig Venter introduced his younger brother, Blane, to media Thursday. He has just graduated from UCT and will enter Altech in the PR and marketing function.<\/p>\n
Andy Baker, former MD of Netstar, has been appointed chief operating officer of the group. He will help Venter to implement the group’s growth strategy.<\/p>\n