Vodacom to raise stake in iBurst owner to 25%
November 26, 2007
By Thabiso Mochiko
Johannesburg - Cellphone network provider Vodacom will increase its stake in WBS, which owns wireless internet provider iBurst, to 25 percent by buying an additional 15 percent.
Last year, Vodacom bought a 10 percent stake in iBurst to get access to the company's Wimax licence. Wimax is a microwave technology for accessing high-speed internet at a distance.
By increasing its stake, Vodacom will have a significant influence in the company.
This will enable it to offer a wide range of high-speed access to customers and increase its customer base. It will build a wireless network for iBurst, which will link to Vodacom's 3G infrastructure.
Vodacom chief executive Alan Knott-Craig said last week that Vodacom had made an offer to buy additional WBS shares at a fixed price.
He would not comment on the value of the stake.
WBS's other shareholders include Mark and Brett Levy, who two weeks ago listed their prepaid voucher company, Blue Label Telecoms, on the JSE's main board.
iBurst has aggressively grown its national network. It now has more than 50 000 clients. It will launch its Wimax services early next year.
Vodacom is entering the internet service provider (ISP) market with plans to build a R400 million, fixed-line fibreoptic cable network.
The fixed-line network will help Vodacom to provide its own network and sell additional capacity to firms.
The service is expected to be available commercially next March. Vodacom has about 1.46 million non-voice subscribers, including high-speed internet services and 3G/HSDPA subscribers.
The firm's revenue from data services such as SMS and internet access increased to R2 billion for the six months to September, from R1.4 billion the previous period.
Vodacom reported total revenue growth of 17.2 percent to R22 billion. The firm's net profit after tax was 17.5 percent higher to R3.7 billion.
The firm's plans to buy an existing ISP have stalled as it is concerned that its acquisition may be blocked by the competition commission.
It is the biggest cellphone network provider and is half-owned by Telkom, which has a monopoly in the fixed-line market.
Vodacom is still looking for acquisitions, but in the meantime it is building its own network.
Telkom plans to sell its 50 percent stake in Vodacom to Vodafone, the other 50 percent shareholder.
Vodafone plans to list Vodacom on the JSE after it buys the remaining stake.
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