Africa Online links with UUNet
By Lisa Clifford in London
Published: December 13 2000 10:47GMT | Last Updated: December 13 2000
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
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.