Telkom has sold its pan-African business, iWayAfrica and Africa Online Mauritius, in a private sale to Gondwana International Networks for an undisclosed sum.
The fixed-line telecommunications operator has described the business as an “immaterial” part of the group, meaning it’s not necessary to inform shareholders through a formal JSE notice.
“This transaction is one of many initiatives that will contribute to our own turnaround, allowing us to focus on our core South African fixed-line and mobile operations,” says group CEO Sipho Maseko in a statement. “We are also pursuing several other initiatives in a coordinated manner to restore Telkom’s financial health.”
iWayAfrica was formed as the result of the amalgamation of MWeb Africa and Africa Online in 2007 when MWeb Africa was purchased by Telkom. Maseko says Telkom has struggled to drive growth and profitability in the iWayAfrica business since it was acquired.
“Several years of poor performance of the iWay Group has resulted in a continued negative Ebitda contribution to our group,” he says. Ebitda, a measure of operating profit, is short for earnings before interest, tax, depreciation and amortisation.
Maseko says that Telkom believes Gondwana has the experience of managing and owning Internet service providers on the African continent and that this is “beneficial in taking the business forward”.
Gondwana CEO Mathew Welthagen says his company intends investing heavily in the business in future.
“We see the opportunities that this offers us as essential to form a platform for our growth in the lucrative, albeit difficult Internet service provider markets in Africa, and we are confident that we will be in a position to expand this moving forward,” he says.
“By applying sound business principles and focusing on skilled resources within the specific country territories, we are confident that we can positively turnaround the iWay business in the short term and provide significant growth thereafter.”
