DiData chief swoons over Kenya ICT market
Derek Wilcocks, CEO of Dimension Data Middle East and Africa, has pointed to the attractive ICT market in Kenya due to its favourable regulatory environment and strong business growth environment.
On Monday (6 April) Dimension Data made an open market offer to purchase 100% of the issued share capital of Nairobi Securities Exchange (NSE)-listed, AccessKenya, for KES3.05 billion (R326.4 million).
Speaking in an interview to CNBC Africa earlier this week, Wilcocks said: “First of all, we are buying into the Kenyan market itself, we feel it’s a very attractive market at this point in time with a very favourable regulatory environment, and a strong business growth environment aswell.”
Wilcocks noted that DiData already has two existing businesses in Kenya, “with both of those businesses doing well”.
“As far as AccessKrenya is concerned, we think that it’s the best possible prospect in terms of the kind of business we are looking for in the Kenyan market. It has extensive national fibre network and a very good existing client base,” he said.
In February, Kenya’s government launched a National ICT Master Plan, Connected Kenya 2017, with the aim of becoming the continent’s ICT hub by generating up to US$2 billion annually.
The plan would seek to develop as many as 500 tier-one technology companies, create 20 global innovations and 50,000 new jobs by the year 2017.
According to Wilcocks, AccessKenya has 340 people, and contains a very strong skillset in the corporate base.
He also pointed out that DiData already had a skillset of 150 in the local market, “and I think those businesses combined will give us a very strong footprint in that market”.
The AccessKenya Group was founded by brothers David and Jonathan Somen, and was one of the first ISPs to launch in Kenya in 2000, according to DiData.
The company, which was also the first ICT company to list on the Nairobi Securities Exchange, employs 340 staff, and provides predominantly connectivity-based data services to about 5,000 corporate customers in Kenya.
AccessKenya owns and operates a 400 kilometre Carrier Ethernet Fibre Optic Network in both Nairobi and Mombasa which connects over 500 commercial buildings.
The company also operates two wireless networks which further extends coverage to 10 other towns around Kenya.
By way of justification for the offer, Wilcocks said: “Wed like to present our same market that we have in South Africa, which is to offer converged services across telecommunications and ICT, primarily into the enterprise space…our primary interest will be developing their enterprise market.”
The CEO continued to talk up the potential in East Africa.
“What we are seeing is a lot of companies are establishing their head offices for Africa in Kenya. It’s a very good hub from an airline perspective, and it’s a very good hub from a bandwidth perspective.
“A lot of the fibre optic cable systems run through Kenya, both into International markets through the undersea systems, such as Seacom, aswell as into interior within east Africa,” Wilcocks said.
The regional chief said that the deal is expected to take some time.
“Unfortunately I think we are in a long and drawn out process just now, and we only expect this to conclude in October to December this year.”
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