{"id":550762,"date":"2006-11-08T02:12:18","date_gmt":"2006-11-08T02:12:18","guid":{"rendered":"http:\/\/localhost:8888\/wordpress\/technology\/550762-iburst-in-play.html"},"modified":"2006-11-08T02:12:18","modified_gmt":"2006-11-08T02:12:18","slug":"iburst-in-play","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/technology\/550762-iburst-in-play.html","title":{"rendered":"iBurst in play"},"content":{"rendered":"

iBurst’s shareholding structure is management’s Richtrau black empowerment consortium’s 60% controlling stake and venture capital group Blue Label Investment’s 40%. With its iBurst wireless offering now proving to be a reliable alternative to South Africa’s broadband conundrum, no wonder it’s continuing to attract the attention of predators. <\/font><\/p>\n

Just 18 months after its launch, iBurst wireless has signed up 30 000 subscribers – a laudable feat, considering that Sentech’s pace-setting wireless broadband offering MyWireless only managed to attract a paltry 8 000 subscribers at its peak and is now probably closer to half that. Telkom’s ADSL has the lion’s share of the market at 135 000, with 3G’s offerings making up the rest of the market. <\/font><\/p>\n

However, iBurst’s biggest drawcards are its wireless licence and strategic assets, such as WiMax spectrum and various other wireless infrastructure spread countrywide. <\/font><\/p>\n

iBurst CE Thami Mtshali declined to comment on a possible takeover bid but did confirm that iBurst’s pheno-menal growth had caught the attention of both SA and international firms. Says Mtshali: "An enquiry into the company’s value should be interpreted within that context. There are no firm bids on the table from either SA or international companies. Even if that were the case, iBurst isn’t for sale." <\/font><\/p>\n

If Mtshali’s denials are a strategy to bide time and pull cash-flush suitors into a bidding race, then the swelling number of telecoms heavyweights reported to be eyeing iBurst is proof it’s working. <\/font><\/p>\n

That iBurst has kept its financial details out of the public limelight makes it more difficult to put an actual valuation on the company. Listed telecoms and technology group Altech and cellular giant Vodacom are said to be locked in a battle for iBurst. <\/font><\/p>\n

Typically dismissive of the report as mere speculation, Mtshali couldn’t deny reports that he’s recently held a series of discussions with Vodacom management. "Those discussions have had nothing to do with anybody bidding for iBurst. We operate in the same industry and it’s only sensible that we engage each other once in a while." <\/font><\/p>\n

Though the Competition Commission could potentially throw a spanner in works concerning Vodacom’s bid for iBurst, telecoms analyst Arthur Goldstuck won’t completely rule Vodacom out of the race. "Vodacom’s bid for iBurst could be pushed through with perhaps some stringent conditions attached. <\/font><\/p>\n

"Growth has been synonymous with Vodacom’s strategy. With SA’s cellular market becoming so competitive, wireless broadband could certainly prove to be Vodacom’s new growth frontier. You’re looking at a business that has consistently produced double digit growth figures." <\/font><\/p>\n

Goldstuck was perhaps more candid regarding Altech’s reported bid for iBurst. Armed with a R1,3bn cash pile (down from R1,4bn after recently handing back around R100m in special dividends to shareholders), Altech CE Craig Venter – steering clear of the debate surrounding iBurst – confirmed that it was on the prowl for wireless broadband opportunities. <\/font><\/p>\n

Says Venter: "In December last year, Blue Label Investments outbid Altech to acquire a 40% stake in iBurst. We bid for a 51% controlling stake, but iBurst’s management settled for Blue Label Investment’s 40% bid – and that’s news in the public domain. I can’t say anything further than what the public knows. But I can confirm that we’re still on the hunt for opportunities." <\/font><\/p>\n

Other than Vodacom and Altech, Goldstuck says that ISP heavyweights Verizon Business SA and Internet Solutions could also be interested in iBurst. Other ICT players said to be in the frame include Datacentrix and MWeb. <\/font><\/p>\n

However, Goldstuck downplays MWeb’s chances. "Its parent company Naspers has the cash to back MWeb’s bid if it were in the running but MWeb typically doesn’t roll out its own backbone. It rather piggybacks on existing infrastructure and therefore it’s out of the picture." <\/font><\/p>\n

Datacentrix CE Gary Morolo prefers organic to acquisitive growth, therefore rubbing Datacentrix out of the equation. <\/font><\/p>\n

Except for the fact that it’s on the verge of a Telkom buyout, Goldstuck reckons that Business Connection would have been in the running for iBurst.<\/font> <\/p>\n

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