@lantic Internet Services, the consumer Internet Service Provider (ISP) of leading alternative telecom operator Vox Telecom Limited (Vox Telecom), is set to buy Absa’s Internet Access business.
The merger of South Africa’s third- and fourth-largest consumer ISPs will create a strong competitor to current market leaders Telkom Internet and M-Web, says Vox Telecom CEO Douglas Reed.
“The deal offers real advantages for Absa’s Internet Access customers,” adds Reed. “Absa’s cost-effective service has played a pivotal role in getting thousands of people onto the Internet for the first time, and many of them are now ready to move on to a more specialised service. Vox Telecom is able to offer a much greater menu of choices including a pay-as-you-go dial-up connection, a Vox ADSL phone, three specialised ADSL offerings and the full range of iBurst and wireless internet offerings.”
“Absa believes that it has found the best specialised ISP for its AIA customer base in Vox Telecom. Vox Telecom is a financially sound company with a compelling value proposition of services to take our customer base into the enhanced digital era,” says Christo Vrey, GM of Absa Digital Channels
Vox Telecom has undertaken to maintain or improve Absa’s current AIA offering prices for the next seven years, as well as maintaining email addresses. “Current email addresses will continue to work until 2014,” says Reed. “All customers will get new email addresses in the next two years, but we’ll continue to forward email sent to their Absamail address for five years after that. We’ll also give people the option of choosing their own personalised addresses, for example email@example.com.”
Vox Telecom is due to take over the business in February 2008 and Reed says customers will experience no disruption.
“We’ve had a lot of experience integrating XsiNet and other recent ISP acquisitions, and the process should be completely seamless to the customer,” he says. “There will be no changes to dial-up numbers, so people shouldn’t notice any difference except that they will have a much greater variety of products to choose from.”
Chairman Tony van Marken says the deal, which will be paid for out of Vox Telecom’s own cash resources, is “an extremely rare opportunity we’ve been wanting for years. We’ve said we will grow both organically and through strategic acquisitions that are accretive to earnings, and Absa Internet Access is a perfect fit for us.”
Van Marken says the acquisition of 68,000 active customers from Absa, currently the third-largest consumer ISP in the country, will strengthen @lantic’s ability to compete with the current incumbents. “We also, as a converged telecoms operator, have the ability to offer much broader services than the traditional ISP.”
“Absa’s choice of Vox Telecom in a very competitive transaction shows great confidence in our ability to look after their loyal customer base,” says van Marken. “We’re looking forward to welcoming them on board once all the conditions precedent have been fulfilled.”
The transaction is subject to the usual regulatory approvals.