JSE listing will give iBurst cash to move into Nigeria

The voice and data carrier is a relatively small player in SA's telecoms space, but is also operating in four other countries and has now applied for a licence in Nigeria.

Chairman Thami Mtshali said iBurst would cover the cost of its Nigerian expansion relatively quickly as it expected to be turning over business of up to US$15m a month after launching.

Mtshali said iBurst expected to win a licence to offer wireless broadband services in Nigeria any day now, and it would work with a local partner to roll out a network. It plans to cover the entire country, and expects to be serving 200,000 subscribers within 10 months.

Nigeria has a huge population, yet there was a dire shortage of reliable telecoms facilities to serve them, he said. “There is nothing there so this should pay for itself within 18 months. We should make US$10m to US$15m a month and I'm being conservative,” Mtshali said.

iBurst could succeed where some other operators had failed because it was more experienced in African territories, he said. “We have mastered the art of acquiring licences and spectrum and we know what to do with them.”

iBurst's Africa division is also about to enter Zambia, and already operates in the Democratic Republic of Congo, Ghana, Mozambique and Kenya.

The company is about 38% owned by the Levy Brothers consortium, who are also the founders of Blue Label Telecoms. Other major shareholders are Vodacom with 24,9% and Mtshali's Galela investment group with 28%.

Each investor except Vodacom will dilute their stakes when the company debuts on the JSE in October or November, through a reverse listing into the shell of S&J Land Holdings.

Mtshali said the listing was designed to raise money so iBurst could spend more on its expansion, particularly through its iBurst Africa division. He did not say exactly how much cash the listing would aim to raise.

In SA the company claims to own between 8% and 10% of the broadband market with 116,000 subscribers. Last week it formally launched iBurst Business to cater for businesses with between two and 200 staff.

“Telcos today focus on consumers and large corporations, but between those two extremes are 500,000 registered small businesses in SA,” said CEO Jannie van Zyl. They were the powerhouse of the economy yet they were largely ignored by telecoms operators. “iBurst Business will build specific products for those guys,” he said.

Source: Business Day

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