OTEL jumps on the acquisition path

Infrastructure-as-a-Service provider OTEL Telecoms has announced its plans to spend over R150 million to expand its network nationally through “strategic acquisitions”.

The group is planning to acquire non-controlling shares in established wireless ISPs (WISPs) across South Africa.

As rationale for the move, the group said that while its core business is in infrastructure, it has large opex costs relating to WISPs.

“Sharing of certain aspects of the infrastructure…can lower operation costs and free up much of the primary management members’ time to focus on growth and optimize network performance whilst increasing profits,” OTEL said in a statement.

OTEL CEO Mohammad Patel said that the group has access to over R150 million in investor funding, which can be used to acquire 20%-49% of fast-growing WISPs in strategic areas.

“With the lack of infrastructure in the smaller towns, it is in OTEL’s interest to provide a combined force to establish a firm foundation for last mile provisioning which will mount up a challenge to other entrant operators in the area,” Patel said.

OTEL said it plans on assisting the Wireless Access Providers’ Association (WAPA) with formalising the WISP industry by setting commercially viable growth plans.

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OTEL jumps on the acquisition path