Listed telecoms group Allied Technologies (Altech) has secured a 10 percent stake in the Kenyan government’s undersea fibreoptic cable project, called Teams.
Teams is one of five undersea cable projects linking Africa with the rest of the world, aiming to provide data bandwidth at a lower cost.
Altech already has a presence in Kenya through a controlling stake in three subsidiaries of Sameer Group. One of those companies, Kenya Data Networks, has 2 400km of fibreoptic network.
Chief executive Craig Venter said major customers in east Africa were mobile GSM operators that required capacity to transmit voice and data traffic. Through Teams they would receive low-cost, high-speed bandwidth access. This would relieve their dependence on slow and expensive satellite connectivity.
Altech’s operating profit for the six months to August rose 34 percent to R409 million. Revenue grew 13 percent to R4.5 billion. Headline earnings a share increased by 19 percent to R2.61. Venter attributed the growth to stringent cost controls, enhanced efficiencies and African acquisitions. The acquisitions include the Sameer companies.
Altech’s telecoms division, which includes Altech Autopage and tracking company Altech Netstar, produced stellar performance, with operating profit rising 80 percent to R325 million and revenue jumping 74 percent to R3.3 billion.
Frost & Sullivan information and communication technology industry analyst Lindsey McDonald said Altech had set out on an expansion strategy in the rest of Africa that had placed it ahead of many of its competitors. But she warned that Altech should expect heightened competition in the markets in which it currently operated.
“Traditional mobile operators have earmarked information technology and data services as areas for growth, and are likely to challenge Altech for market share.”
Last month Altech won a landmark ruling that cleared the way for value added network service providers (Vans) to build their own network. Minister of communications Ivy Matsepe-Casaburri plans to appeal the ruling. Venter said Altech was confident that the ruling would be upheld.
Altech shares gained 3.09 percent to R50 yesterday. The telecoms sector rose 9.01 percent.
Business Report
