South Africa\u2019s Internet Service Provider (ISP) market is fiercely competitive – which means that margins are generally thin and volumes are needed to build a strong business model.<\/p>\n
An acquisition is a quick way to increase subscriber numbers, and over the years there have been a few high profile ISP acquisitions. Some of the high-profile deals include Vox Telecom<\/a>\u2019s acquisitions of @lantic<\/a>; ABSA<\/a>\u2019s Internet access business; and Afrihost<\/a>\u2019s purchase of Axxess<\/a> in 2011.<\/p>\n This raises the question whether 2012 may see more consolidation in the South African ISP market.<\/p>\n According to Internet Solutions<\/a> MD, Derek Wilcocks<\/a><\/strong>, there will be continued consolidation in the market by the players who don’t own their own network.<\/p>\n \u201cIn this highly automated world, service providers can basically add an infinite number of clients without significantly increasing their operating cost. As such, the players with the best systems and processes will continue to be targets,\u201d said Wilcocks.<\/p>\n Wilcocks however added that the shareholders of the bigger players, especially those who own their own networks, are unlikely to make acquisitions cheap and therefore attractive.<\/p>\n \u201cWe are therefore unlikely to see any big buy-outs in this sector during 2012,\u201d he said.<\/p>\n Vox Telecom CEO Douglas Reed<\/a><\/strong> agrees with Wilcocks, saying that he does not expect \u201canything material\u201d in terms of ISP acquisitions in 2012.<\/p>\n MWEB<\/a> CEO Rudi Jansen<\/a><\/strong> concurs, saying that he only sees limited opportunity for consolidation in the local ISP arena.<\/p>\n Cybersmart<\/a> MD Laurie Fialkov<\/a><\/strong> however disagrees with Jansen, explaining that he expects a great deal of consolidation in the local ISP market as resellers’ margins are shrinking.<\/p>\n \u201cWe are seeing a lot of the smaller guys defaulting on their payment,\u201d said Fialkov.<\/p>\n","protected":false},"excerpt":{"rendered":" Top executives share their views on consolidation in the ISP market and whether we can expect acquisitions in the South African service provider market<\/p>\n","protected":false},"author":2,"featured_media":2231,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[435,503,63,26,97,437,38,41,62],"class_list":["post-2225","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-telecommunications","tag-cybersmart","tag-derek-wilcocks","tag-douglas-reed","tag-headline","tag-internet-solutions","tag-laurie-fialkov","tag-mweb","tag-rudi-jansen","tag-vox-telecom"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/2225","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=2225"}],"version-history":[{"count":11,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/2225\/revisions"}],"predecessor-version":[{"id":2229,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/2225\/revisions\/2229"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/2231"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=2225"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=2225"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=2225"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}