Share

MWEB Business under the hammer

Cape Town - MWEB Business is for sale, the company announced in a brief statement.

On Monday, the company announced that its Business division was being sold to Internet Solutions (IS) subject to approval by the Competition Commission.

MWEB said that in addition to MWEB Business, its network support division Optinet would also be sold to IS.

"We will retain our consumer ISP, MWEB Connect, and to this end there will be absolutely no change to your current service", Derek Hershaw, MWEB ISP CEO wrote to subscribers in a short note.

The deal is symptomatic of consolidation in the industry and rumours have been swirling that junior mobile operators Cell C or Telkom Mobile might be targets of a takeover.

ADSL services

Vodacom in late 2013 announced a takeover bid for Neotel as the company looks to launch a comprehensive fibre to the home service.

MWEB said that the deal would allow it to focus on consumers.

"Going forward, this deal will allow us to extract greater benefits and efficiencies by combining our underlying technology platforms with IS. At the same time we will be able to focus more closely on our consumer ISP, and ensure that we continue to offer you the kinds of online products and services so essential to your everyday lives", said Hershaw.

MWEB was the first company to introduce uncapped broadband in SA and the company has been a consistent campaigner for lower data costs.

However, some have raised questions about the viability of cable broadband that ultimately relies on Telkom's infrastructure.

There are six million copper cable connections possible for broadband in SA, but only around 800 000 currently subscribe to ADSL services.

Broadband policy

Part of the reason that has been cited is the cost of the bundled service from the operator.

"Telkom should be split into two companies, one should be an infrastructure company that provides broadband and fixed line infrastructure to direct to consumer ISPs and telcos, this company should be prohibited from dealing with end consumers", Fontera Digital Works CEO Simon Leps told Fin24 recently.

The government has a target of 100% broadband by 2020, and the Draft National Broadband policy has identified Telkom as a key link in the chain.

"Although a large number of internet service providers can provide internet services over ADSL, their ability to differentiate their offerings and service levels is limited by that fact that there are only three points of interconnect on the Telkom network, which effectively makes them entirely dependent on Telkom for domestic networking", the document says.

MWEB did not reveal the financial implications of the sale.


* Fin24 is part of 24.com, a subsidiary of Media24, which is in the Naspers stable. MWEB is a subsidiary of Naspers.


- Follow Duncan on Twitter

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.92
-0.1%
Rand - Pound
23.90
-0.0%
Rand - Euro
20.44
+0.1%
Rand - Aus dollar
12.35
+0.0%
Rand - Yen
0.13
-0.1%
Platinum
909.30
+1.4%
Palladium
1,015.00
+1.3%
Gold
2,220.40
+1.2%
Silver
24.86
+0.9%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.9%
Resource 10
57,251
+2.9%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders