Altech makes East-African coup

Johannesburg - Telecommunications and technology group Altech has announced a partnership with undersea cable company Seacom to provide bandwidth to East Africa.

The company said the deal, combined with its prior agreement with the Teams cable project, makes Altech probably the second largest bandwidth holder on the continent.

Craig Venter, CEO of Altech, said his company's Kenya Data Networks (KDN) subsidiary is rolling out thousands of kilometres of fibre in regional networks in East Africa, which will be used to connect countries in the region to both Seacom and Teams for international bandwidth.

Altech and Seacom consider East Africa to be overtaking South Africa in terms of bandwidth provisioning.

Said Venter: "The rollout via KDN allows for five East African countries to effectively be plugged in to the Seacom undersea cable."

With the combination of Seacom and Teams, Altech will have 15Gbps of international bandwidth off the east coast of Africa.

"But if you don't have an inland terrestrial network, you don't get the bandwidth and the speeds delivered to end users," Venter added. "We felt we needed to be investing in both sides of that equation by investing heavily in domestic networks and international bandwidth projects."

He added that the investments in KDN, Seacom and Teams allowed Altech to provide backhaul capacity to major GSM operators in East Africa, including Safaricom, Zain and Essar which Altech had already been servicing via KDN.

"We see the market increasing from 10Gbps to 800Gbps in the future," said Venter. "We have also acquired 10% of the Teams undersea cable for additional bandwidth. This, combined with Seacom, makes Altech one of the largest bandwidth suppliers in Africa.

"Purchasing bandwidth in large volumes has a significant impact on price and makes it much cheaper with cost savings that can be carried over to customers."

Added Seacom CEO Brian Herlihy: "When you look at what Seacom is achieving to do - it got to the beach. But once you're at the beach you need a partner to bring the bandwidth to end-users. Altech is our strategic partner to achieve this in East Africa."

"We did due diligence in East Africa to see who was capable of doing this. We had literally hundreds of offers, but only KDN had fibre in the ground. When Craig and his team showed us their plans for East Africa, we knew they were the right partner," he said.

"It's ironic to see East Africa, which was considered as a secondary market, overtaking the South African market," he added.

Venter said neither Altech nor Seacom would be detailing the exact value of the investment being made, but indicated that Altech is spending about R400m on the deal and that Seacom is also investing in Altech, which will offset the spend.

He added that Altech would still end the year with a balance in excess of R500 million on the balance sheet.

"We will not go into debt," he said.

- Fin24.com