Consolidation in South African Telecom sector

The mobile operator MTN is acquiring a 50 percent stake in one of the top hosting and internet service providers (ISPs) in South Africa, Afrihost. While this deal is still subject to regulatory approvals, it does not come as a complete surprise as these two companies already joined forces in 2012. The acquisition will enable MTN to leverage Afrihost’s competitive pricing and value proposition, and expand its enterprise broadband offerings and services to the SME market.

The deal is another confirmation of the consolidation in the ICT sector, following Vodacom’s imminent takeover of Neotel in May 2014 and the recent Telkom and BCX deal.

MTN continues to expand its integrated ICT business and has also partnered with PriceCheck to launch a co-branded mobile application. This application will enable customers to compare product and service prices, access product reviews, store details and a barcode scanner to check prices. The partnership with PriceCheck highlights MTN’s movement into the digital space.

The telecoms market is changing rapidly and the acquisition and partnership with Afrihost and PriceCheck, respectively, will enable MTN to better serve its enterprise and consumer markets. The expansion of its broadband offerings and entering the m-commerce market further enables MTN to provide targeted and integrated service offerings to meet tailored customer requirements.

Joanita Roos, Frost & Sullivan Africa Practice