A new data-only network is set to take on South Africa’s big telecommunications players.
On Tuesday, the former head of iBurst and Mxit, Alan Knott-Craig Jnr, announced that a new business called HeroTel will consolidate the local wireless internet service provider (Wisp) industry to provide a data-only network in the country.
HeroTel is planned to officially launch on April 1 2016.
“South Africans need fast, reliable and affordable broadband and are increasingly looking for an alternative to ADSL,” said Alan Knott-Craig Jnr, executive chair of Hero Telecoms.
He said that wireless providers are ideally placed to profit from consolidation.
“Wisps already satisfy this craving with net profit margins reaching as high as 40%. However, due to the fragmented nature of the industry the Wisps suffer from lack of co-ordination.
“Herotel plans to consolidate the disparate regional wireless broadband providers under a national brand and unlock the economies of scale,” added Knott-Craig, who also heads up non-profit Wi-Fi initiative Project Isizwe.
The planned launch of HeroTel comes amid booming data demand in South Africa.
According to the Cisco Visual Networking Index 2015, there will be 27 million internet users in SA by 2019, up from just 15 million in 2014. Internet protocol (IP) traffic will also grow six-fold, representing an annual growth rate of 44%.
Cisco’s research also indicated that by 2019, smartphones will cement their position as the primary internet tool, commanding 30% (57.5 million) of all networked devices, up from 22% last year.