DataPro takes on Telkom

By Nicola Mawson for DataPro
Johannesburg, 08 Aug 2006

Telecommunications service provider DataPro Group is positioning itself to garner some of the R85 billion that is spent on telecommunications services in SA annually.

Executive director Tony van Marken says subsequent to its R70 million acquisition of Definity Telecom, the company derives half its revenue from voice services, with the balance coming from the original ISP business. DataPro Group, which trades on the alternative exchange, competes through wholly-owned subsidiaries DataPro, VOX Telecom and @lantic Internet Services.

This, he says, complements its strategy of becoming a telecommunications service provider that offers voice and data services, a vision the company will only be able to fully achieve once interconnect liberalisation becomes a reality. It has already been assigned its own number ranges by the Independent Communications Authority of SA.

While a small player in the industry, Van Marken believes the company will be able to glean some voice business from the incumbent Telkom, and be a credible alternative to the second national operator when it comes into play.

"We are trying to create an alternative telecoms company," he says. He believes, despite being the underdog, the firm is small, independent and nimble enough to make a difference to those companies seeking an alternative telecommunications provider.

Van Marken says the potential to do this is there, as there is a "large, addressable market", of which the company is targeting about 5%.

While growing its annuity business organically, the company also has an acquisitive growth strategy. He says DataPro will continue to keep an eye out for companies it can consolidate into its stable, he says.

Its most recent acquisition, Definity, was undertaken through R35 million in stock and R35 million in cash raised through an oversubscribed vendor placement, at a time when the JSE All Share had taken a knock. Almost half of the cash placed into the company was from a corporate advisory and private equity firm, Metier.

It has the potential to make further such acquisitions through using its stock as currency or via further vendor placements.

The company`s latest results, for the six months to end-February, indicate revenue was R78.7 million, of which gross profit was R31.3 million. Its previous half-year results saw revenue of almost R50 million, and gross profit of R22.9 million.