In a recent Business Times article, it was erroneously reported that Iridium has "all but turned its back on South Africa" in favor of more developed markets worldwide.
Let me emphasize some relevant facts. For several years, Iridium Africa Corporation has worked diligently to pave the way for Iridium satellite and cellular roaming services to become available in South Africa.
We have finalized terms of service with Telkom South Africa and, as noted in the article, have concluded distribution agreements with local partners MTN and Vodacom. In addition, we have opened offices in Cape Town and Johannesburg, from where we plan to serve the entire African continent, and we have hired nearly 50 local staff to better serve the South African market. Indeed, Iridium believes South Africa to be among its top 20 markets worldwide.
Clearly, we have turned our back on no one.
Unfortunately, the article does not even make passing reference to the main obstacle Iridium faces in its efforts to serve the South African market, and that is our lack of a license to provide the satellite communications we are now delivering in most of the world. We applied for the license nearly three years ago and have worked with SATRA, the Ministry of Telecommunications, and Telkom South Africa to define and meet the criteria for obtaining a license. While the regulatory framework was finally passed last December, South Africa remains one of the few major markets in the world where Iridium is not authorized to provide its satellite telephone service.
I would also take issue with how the article positions Iridium service pricing relative to Globalstar. Are these comparisons based on Globalstar`s projected wholesale costs or on the actual cost of its service to the customer inclusive of landline connection charges, taxes and service provider markups? The only way to know for sure is to authorize both companies to commence operations and let the consumers of these services decide which
offers the better value for their money. Although Iridium has no competition at the moment in the handheld satellite telephone market, we believe that Iridium will be competitive in terms of pricing and value once Globalstar and any other providers come on line.
Overall, we see significant potential for Iridium in Africa. Indeed, the company is set to re-double its sales efforts to key industrial sectors such as mining, oil and gas and tourism among others that are prevalent in South Africa and throughout the continent. The utility of the Iridium hand-held satellite phones was borne out during the Africa Connection Rally that traveled from Tunis to Cape Town earlier this year. One member of Minister Jay Naidoo`s team deemed the four Iridium phones donated for the trip to be vital to the smooth running of their activities.
Minister Jay Naidoo said in an article preceding the Africa Connection rally "we want a change in attitude on the continent our aim is to get the heads of states and governments to start recognizing Africa`s need of a technological revolution." We are determined to play a role in making this revolution a reality and we hope that South Africa will authorize us to fulfill that commitment in the near future.
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