Telkom SA sells loss-making iWayAfrica

By JEVANS NYABIAGE

KENYA: South Africa’s largest fixed-line phone operator, Telkom SA has sold its loss-making iWayAfrica and Africa Online Mauritius to Gondwana International Networks via a private sale.

This will allow the company to focus more on its core South African fixed-line and mobile operations, Telkom CEO, Sipho Maseko said. No financial details were disclosed. Maseko said that iWayAfrica and Africa Online were not running a profit and that the deal was part of the operator’s cost cutting and restructuration strategy.

“This transaction is one of many initiatives that will contribute to our own turnaround, allowing us to focus on our core South African fixed-line and mobile operations. We are also pursuing several other initiatives in a coordinated manner to restore Telkom’s financial health,” Maseko said.  iWayAfrica was formed as the result of the amalgamation of MWEB Africa and Africa Online in 2007 when Telkom SA purchased MWEB Africa.

Maseko said that Telkom has struggled to drive growth and profitability in the iWayAfrica business since it was acquired. In 2011, the firms restructured sending home tens of employees.  “Several years of poor performance of the iWay Group has resulted in continued negative EBITDA contribution to our Group.”

Referring to their purchase that was concluded late afternoon on Friday, December 20, 2013, Gondwana International Networks indicated that their acquisition is a long-term investment.

“We intend to invest heavily in the business in the future. We see the opportunities that this offers us as essential to form a platform for our growth in the lucrative, albeit difficult ISP markets in Africa, and we are confident that we will be in a position to expand this moving forward,” Gondwana’s Chief Executive Officer, Mr Mathew Welthagen said.

Significant growth

“By applying sound business principles and focusing on skilled resources within the specific country territories, we are confident that we can positively turnaround the iWay business in the short term and provide significant growth thereafter,” added Welthagen.

The iWayAfrica business currently operates in eight countries on the continent offering terrestrial wireless and VSAT services to business and residential markets as well as via its channel partners in many other countries on the continent.