MWEB is now off the auction block, after Napers took the decision to withdraw it, owing to the current unfavourable global economic climate.
In an announcement to the JSE yesterday, the multi-national media business, Naspers, said that the decision to withdraw its Internet service provider (ISP) was due to the economic conditions globally and the contraction in credit markets, which led to the company’s termination of the auction process for the disposal of MWeb SA.
It is understood that, although details are not clear at the moment, on what the company plans to do with the South African arm of the business, Telkom has has bought 100% of MWeb Africa and 75% of MWeb Namibia, from MultiChoice Africa and MIH Holdings, respectively.
The deal will see Telkom parting with a total of $63 million or around R610 million, for both subsidiaries.
“Expanding beyond the borders of SA provides Telkom with an opportunity to become less dependent on domestic revenue streams,” said Telkom CEO Reuben September.
The transaction is expected to be completed by April next year, but the deal will have to receive regulatory approvals in the countries where MWeb Africa, headquartered in Mauritius, operates.
The company has other operations in Namibia, Nigeria, Kenya, Tanzania, Uganda and Zimbabwe, and an agency arrangement in Botswana and distributors in 26 Sub-Saharan African countries.
“This acquisition, together with Telkom’s investment in Africa Online, is expected to increase the value proposition of our product and service offerings to all customer segments in Sub-Saharan Africa. Telkom’s position as partner of choice for connectivity and related services in Africa is expected to be strengthened,” added September.
This sees Telcom expanding its base, after it bought into Africa Online in February last year, in a deal that saw it paying £10.3 million (R160) million.
Naspers first announced it would auction the ISP in June, after the company had received several offers for the business.
MWeb is one SA’s largest residential ISPs, with over 350 000 dial-up and broadband customers in both the home and business markets, while also owning the largest VSAT corporate Internet base in Sub-Saharan Africa.