Internet Solutions and CWN acquire stake in Mozambique based ISP

Internet Solutions (IS) and Convergence Wireless Networks (CWN) announced today that they have collectively acquired a 68.5% equity stake in a leading Mozambique based internet service provider (ISP), INTRA Lda. The deal forms part of IS’ East-African expansion initiative aimed at capitalising on the recently launched Seacom undersea cable. IS will take the lead as INTRA’s operating partner, bringing a wealth of international experience in the deployment of world-class converged communication solutions, while CWN will act as an active, strategic financial investor.

“Securing a presence in Mozambique is important as the country is strategically significant due to its geographical relevance to South Africa,” says Hillel Shrock, Business Solutions Director at IS. “The country also provides an ideal base to reach various landlocked African countries along Mozambique’s and South Africa’s borders, as it is only 200km wide. This is key to developing our business into Uganda and Tanzania and growing our existing business in Kenya.”

According to Shrock, IS also has a number of South African customers with a presence in Mozambique. “Acquiring a stake in an existing Mozambique based ISP was the ideal approach, as it enables us to leverage off of their established infrastructure and immediately secure a broader customer base,” he says. “Furthermore, the investment we are making in INTRA allows us to deliver the substantial capacity we have secured as an anchor tenant on Seacom to our existing and prospective customers in the region. This is a key element in our strategy to grow our pan-African footprint.”

Established in 2001, INTRA was one of the first wireless broadband ISP’s in Maputo, and as a leader in this field carries with it a wealth of local market knowledge. INTRA has a substantial spectrum allocation from the industry regulator that it uses to deliver connectivity services to local consumers and SMEs. “IS will utilise this wireless infrastructure to service the established SME and the growing corporate market in Mozambique.” comments Karim Premji, Chairman and founding member of INTRA Lda. “The INTRA business division that serves these markets will therefore be rebranded as IS Mozambique, while the INTRA brand will remain operational in the Mozambican consumer market.”

IS plans to retrofit 20 base stations in Maputo, install the latest generation MPLS network and support it with industry best practice power back-up and redundancy, which will then enable the high capacity core backbone to connect into the Seacom landing station. Current Maputo based IS satellite customers will be transferred to a cable based Virtual Private Network/MPLS Network, while a state of the art V-Sat hub will be deployed in Maputo to connect outlying areas in the north, as well as customers in Zambia, Zimbabwe, Malawi, Angola and parts of South Africa.

Says Mr. Premji. “We are very pleased that the deal with IS and CWN was realised, as this partnership provides a quantum leap in achieving INTRA’s objective of becoming a carrier grade service provider, offering services at a level of 99.9%. We also realised that to continue our leadership position, INTRA had to obtain capacity from Seacom. As early as May last year we started looking for ways to get involved with Seacom, which is when we approached CWN with a proposed plan to raise investment capital.”

CWN was established as a joint venture between Convergence Partners and Comsol Wireless Solutions, one of the company’s other investee operations, to build a portfolio of investments into wireless broadband network operators across Africa. “The investment in INTRA is a good example of our strategy as we are able to capitalise on our existing investments in Seacom and our close business relationship with IS through our involvement with Dimension Data,” says Arif Hussain, Executive at CWN.

Hussain says that CWN’s priority was to identify potential investments in those markets on the Eastern seaboard in which Seacom was planning to launch. “The INTRA deal provided us with one such opportunity and the timing is perfect with Seacom having gone live in July,” he says. “The management team in place at INTRA is extremely strong and the business’ ability to leverage off IS’ technical expertise and established African footprint means we are able to provide a significantly enhanced service offering; this is the ideal synergy required to make this deal work and it is fantastic to see CWN’s strategy starting to come to fruition through this first investment into INTRA.”

“With Mozambique’s limited international bandwidth capacity there is substantial opportunity in the SME and corporate connectivity space to secure significant market volume with our Seacom offering,” says Shrock. “We have already signed up new customers on this increased capacity and with CWN providing the investment capacity, which enables the roll-out of the required infrastructure to meet the objectives of the business, we are very confident that the investment in INTRA will be a great African success story for everyone involved,” he concludes.