Africa Online

Name ID 724

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Turner, Mark AFRICA ONLINE: ISP buys Kenyan rival
Extract Author: Mark Turner
Extract Date: 2000 January 17

AFRICA ONLINE: ISP buys Kenyan rival

Nairobi

Africa Online, the continent's most broadly based internet service provider, has bought its main Kenyan rival, Net 2000, for $3.3m - the first of a string of planned acquisitions as the company seeks to become Africa's premier ISP.

Africa Online already operates in six sub-Saharan African countries, most recently moving into Swaziland, and is planning to double that number by the end of the year.

It has 13,500 active dial-up subscribers (compared with Net 2000's 3,400 registered users), and in Kenya 11,500 customers regularly use its E-touch product - a bureaux where customers can send mail and access the internet on a pay-per-use basis.

E-touch has also been launched in Tanzania and Ivory Coast, is to be relaunched in Ghana, and will soon move to Zimbabwe.

These heady ambitions have largely been made possible by African Lakes, a London-listed company with interests in the internet, information technology and the automotive industry.

In 1998, it invested $2.8m in Africa Online through convertible loans - giving it the right to not less than a 65 per cent stake in the company - and has since invested a further $10m.

'African Lakes is committed to addressing the needs of progressive Africa, and internet services are right at the forefront,' said Chris Foy, chief executive. 'This acquisition strengthens the leadership position of Africa Online significantly in sub-Saharan Africa.'

Ayisi Makatiani, chief executive of Africa Online, said: 'The year 2000 has started very well - and we expect to do a lot more of these kind of investments.'

E-touch is expected to see substantial growth, with a potential market of 18m-22m users in countries where Africa Online operates.

'The product allows us to use and build our brand name,' said Mr Makatiani. 'It is also a feel-good project because it offers universal access, which is sustainable because people pay for it.'

Africa Online is also looking to develop its e-commerce services: from Swaziland it is helping to sell glass carvings over the internet, in Kenya it has a project with Dorman coffee, and from Ivory Coast T-shirts are sold through an online boutique.

Extract ID: 662

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The Economist
Extract Date: 2000 Sep 9

Tapping into Africa

AN ETHIOPIAN touts goats, Somalis in Kenya sell henna and incense, a censored Liberian radio station defies the government and a Namibian invites offers for a taxi licence. All do so on the Internet. Is Africa getting online? Not really: of some 360m Internet users round the world, only 3.1m are thought to be in Africa, and most of them are either in South Africa or north of the Sahara. Nigeria probably has 100,000 users; Kenya, a relatively prosperous country, has even fewer. But access is spreading fast, perhaps even tripling over the course of last year. On August 28th, Somalia became the latest African country to offer local access to the Internet, and for the first time surfers can use the net in Swahili.

The UN has put its faith in the Internet as a means for poor countries to leapfrog stages of development. The secretary-general’s millennium report, written for the summit in New York, speaks of building 'digital bridges'. The UN’s own plans for bridge-building include a corps of volunteers to teach people in developing countries how to use computers, and a health network to provide hospitals and clinics with up-to-date medical information.

The Internet could also be a way round one of Africa’s greatest weaknesses, its feeble infrastructure. Poor roads, uncertain power supplies, an unreliable postal system and bad telephone lines (there are as many telephones in Tokyo as in all of Africa, says the UN report), add to Africa’s economic and political woes. Without easy access to information, farmers cannot know what price is fair for their goods, traders have no alternative to buying imports from local sources, doctors rely on ancient technology, voters can make no informed choices.

The Internet could change things. Just as battery-powered and wind-up radios brought much of Africa into contact with the outside world, so can computers make that contact richer. And cheaper: e-mailing a 40-page document from Madagascar to Côte d’Ivoire costs 20 cents, faxing it about $45, and sending it by courier $75. More and more African newspapers now post online editions, and use foreign news found on the Internet.

Most of the initiative, and investment, is expected to come from private companies and individuals. A new 32,000km (20,000-mile) undersea fibre-optic cable system, which will form a ring of connections around the continent, is due to open in two years. Internet cafés have been springing up in African cities wherever people have the money to use them. The founder of a cyber café in Zanzibar provides websites for government officials, hotels and banks, and collects payments from drop-in users. He also wants to change people’s lives by putting the Internet, free, in local schools.

On a larger scale, an East African company, Africa Online, based in Nairobi, works in eight countries. One of its aims is to provide Internet connections for people without their own telephones or computers. Using e-touch technology (a simple way to operate e-mail), it wants to put terminals in post offices throughout the region. Last month the company announced a deal with Barclays Africa to open a string of Internet centres. Although the Internet cannot help the truly poor, who look for pencils, not computers, it may well speed the pace of change.

Extract ID: 1523

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Clifford, Lisa Africa Online links with UUNet
Extract Author: Lisa Clifford
Extract Date: 2000 Dec 16

Africa Online links with UUNet

London

Africa Online, the continent's most broadly-based internet service provider, has taken a step towards its goal of becoming Africa's dominant ISP by forming a joint venture with Worldcom subsidiary UUNet to develop internet services across 14 countries.

Africa Online, founded in 1994 and now owned by the UK's African Lakes, will control 49.99 per cent of the new company, to be called UUNet Africa. UUNet SA, the network service provider subsidiary of WorldCom, will take the rest.

UUNet Africa will be based in South Africa and is expected to start trading by the first half of 2001.

It will focus on eight countries including Kenya, Uganda, Tanzania, Swaziland, Zimbabwe, Zambia, Ghana and the Ivory Coast. Service for six others is expected to be rolled out later. The joint venture provides a springboard for African Lakes' expansion throughout the continent and furthers its ambition to become Africa's top ISP.

Although penetration of telephones and personal computers remains low, the market for internet services is expanding rapidly through corporate use and public access products.

African internet users are estimated to number about 3m, with 2m of those in South Africa.

This works out at about one internet user for every 250 people, against a worldwide average of one in 35 and a north American and European average of one in three.

Paul West, senior executive at African Lakes, said: 'There's no way the markets are saturated. There are 240,000 telephone lines in Kenya alone.'

Earlier this year, African Lakes bought Net 2000, its main Kenyan rival, for $3.3m.

It now has more than 24,500 dial-up customers and a further 24,000 regular users at its 670 e-touch centres - bureaux where customers can access e-mail and the internet.

Founded in the 1870s by Glaswegian missionaries, the company was a traditional conglomerate with interests in mining, plantations, hotels and railways.

It restructured several years ago, refocusing the business on IT, the internet and automotives.

In 1998, it invested $2.8m in Africa Online through convertible loans, giving it the right to a 65 per cent stake, and is now in the process of acquiring the rest.

Extract ID: 1542
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