Intelsat New Dawn, the $250 million (R2.53 billion) satellite joint venture between a South African consortium, led by Andile Ngcaba, and global satellite firm Intelsat, has been signed. It already has pre-orders totalling $350 million (R3.54 billion).
Legal technicalities delayed the signing of the venture last month. However, all parties are now confident the satellite will be in a geo-stationary orbit of 33-degrees east by 2011.
The satellite will carry wireless backhaul, broadband and television content to the African continent. It will be marketed and operated as part of the Intelsat fleet.
The South African consortium will have a 25.1% stake and consists of Convergence Partners, the private equity group chaired by Andile Ngcaba, who is also chairman of Dimension Data SA and former director-general of the Department of Communications.
Sky of diamonds
Convergence Partners is also among the lead investors in East African Coast undersea cable operator Seacom, which is scheduled to become operational in June next year.
The other South African investor is Altirah Telecoms, in turn a joint venture between private equity and hedge fund firm Altirah Capital and the Oppenheimer Family Fund. The Oppenheimers are one of the country's wealthiest families; the name is closely linked with resources group Anglo American and diamond group De Beers.
David Frankel, a founder and former CEO of Internet Solutions, which is owned by Dimension Data, is a partner in Altirah Capital.
Intelsat will own the remaining 74.9% of Intelsat New Dawn and will contribute $25 million in cash to the joint venture.
Nedbank Capital and the Industrial Development Corporation will raise the balance of the capital through debt financing that will be arranged.
Once in orbit, the satellite will have 28 C- and 24 Ku-band transponder units, most of which are already committed to clients.
According to an Intelsat New Dawn statement, network operator Vodacom and its subsidiary Gateway Communications were among the first clients to sign up. Other clients are Zain Nigeria and Gilat Satcom. The statement says some of these contracts are of a long-term duration of up to 15 years.
Frankel says the pre-order selling is a good sign of the demand for connectivity.
“There is always a fine line with pre-order selling. You want to sell enough to cover the initial debt, but then you also want to have some capacity to sell later on. In theory, we could have pre-sold the total capacity,” he notes.
Blast off
Ngcaba says the joint venture is part of a strategy to use tried and tested technologies to help develop the continent's communications infrastructure. He says the satellite will offer an alternative route to the Seacom cable, but he does not envisage the two entities merging into one company.
“Fibre and satellite are complementary services. This is just the beginning for Intelsat New Dawn, however, our main focus is to get the satellite built and put into orbit.”
Ngcaba is confident the ever-increasing demand for telecommunications services in Africa will mean there will be plenty of demand for this satellite and other projects that are in the pipeline.
According to Ngcaba, any operator with the requisite licences can land the Intelsat New Dawn signal, which in SA's case means holding an individual-electronic communications network services licence.
“How they land it is up to them. They could either build their own teleports or go through a third party. We just supply the space link.”
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