JSE-listed technology group Altech is preparing to tap into the "unlimited" sub-Saharan African broadband market, having concluded a technology and distribution agreement with US-based CityNet Wireless.
The company said this morning "the principle of this agreement will enable Altech to enter the broadband infrastructure and operator space in sub-Sahara Africa, using proven technology in operation in more than 40 cities worldwide".
Altech CTO Steven Sidley would not be drawn on details of the group's strategy for the region, but said it would include "all of sub-Saharan Africa".
Sidley explains the companies plan to establish wireless WiFi mesh networks, using a combination of standard WiFi protocols, mesh architecture and network flexibility, and network management software tools, which allow for optimum throughput, minimum latency and maximum quality of service.
According to Altech, CityNet Wireless has deployed wireless WiFi mesh networks globally since 2003, including in densely populated cities such as Houston, Panama City and Mexico City.
Sidley states the companies are conducting due-diligence studies in various countries in sub-Saharan Africa to "tighten its targets" by identifying the more desirable destinations. Factors that would influence a country's desirability include political stability, regulatory environment and whether the company already has some form of infrastructure there.
Cherry-picking
While he would not discuss specific countries or the projected capex for Altech's sub-Saharan Africa strategy, Sidley says the partnership is "far down the road" in some areas. However, no contracts are in place yet.
Sidley believes the African broadband market offers "unlimited" opportunities, with IP-based wireless communications having the potential to reach "hundreds-of-million" of users. This, he says, makes it important for the group to cherry-pick the best opportunities in the region. He describes the African market as "competitive", but says Altech's success in West Africa, with NamiTech, means the company will have a leg up on the competition.
This is not Altech's first venture into the broadband space. The company was allocated WiMax spectrum by SA's communications regulator in February, and is deploying a test network in Gauteng. Sidley refused to be drawn on details of this project.
In a statement this morning, Altech CEO Craig Venter said: "Broadband network delivery systems are now at the centre of all global digital communications. Our choice of CityNet Wireless as our technology partner in this deal reflects our strategy to expand into broadband markets in Africa, where cost-efficient use of advanced IP-based wireless networks is the key to meeting massive pent up demand.
"We feel it is now strategically appropriate for Altech to embark in this new direction. We are confident, not only in the CityNet Wireless technology and experience, but that we have chosen the optimum moment to exploit this opportunity in Africa."
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