RealTime IT News

Datatec Ponders Expansion, Listing For "SA's Largest ISP"

[Johannesburg, SOUTH AFRICA] Datatec released its annual results this week, revealing considerable growth in its Internet service provider joint venture UUNet SA, an operation which Datatec refers to as the "largest ISP in South Africa."

Earnings in UUNet SA, a joint venture between Datatec and the U.S.-based UUNet Technologies, skyrocketed during the financial year to-end March 2000, tripling in value and leading Datetec to consider expanding the division into other sub-Saharan African countries.

Datatec speaks of UUNet in glowing terms, describing it as South Africa's leading Internet service provider, a contention which would raise many an eyebrows due to the low-profile nature of UUNet's operations.

The fact is, however, that UUNet SA boasts South Africa's largest dial-up ISP, M-Web as its major client which would add credibility to Datatec's claim.

The Annual Report highlighted UUNet's five-year annual growth rate of 113 percent, swelling the coffers to R210 million by the end of March this year. For the financial year ending in March, UUNet's earning vaulted from R12 million to R33 million, leading Datatec to speak of expansion into twelve other sub-Saharan African countries.

The company recently entered the Botswana market through a 50 percent stake in ISP, Interswana, and opportunities within economically viable Southern African Development Community nations are currently being investigated.

A potential listing is also a consideration according to the Annual Report. Of Datatec's three self-standing operations, the company has committed itself to listing at least two on foreign exchanges before the end of the next financial year in March 2001.

Datatec announced that it intends to list the U.S.-based Westcon on the Nasdaq exchange within the next nine-months, while the U.K.-based E-Services should be a fixture on the London Stock Exchange before the next financial year is out.

Presumably UUNet SA would list on the Johannesburg bourse, supported both by continued investment by UUNet Technologies and Datatec's existing status as the second or third largest South African IT stock. Should the current rate of operational growth be sustained, any such listing would appear to be a safe bet for the technology company, adding credibility as the operation expands into a regional enterprise.

All three of Datatec's major operations reported increased operating profits, Westcon's profits up from R296 million in 1999 to R445 million, E-Service up to R162-million (from R77 million) and UUNet profits up to R33 million (from R12 million).

Across the board, Datatec reported a 54 percent surge in organic growth, operating profits of over $100 million and an 84 percent gain in revenue.