According to the Wall Street Journal, South Korea’s KT Corp is close to signing a deal to buy pan-African internet service provider (ISP) iWay Africa from Telkom South Africa. A person familiar with the transaction told the WSJ: ‘The iWayAfrica deal is almost done and is likely to be made public soon’. A KT Corp spokesman admitted: ‘[iWay Africa] is one of our considerations, but nothing has been decided’. Previously, in May last year KT had to suspend its plan to acquire a 20% stake in Telkom itself amid opposition from the government – Telkom’s controlling shareholder.
iWay Africa was formed in May 2011 following the merger of Telkom’s pan-African data assets AfricaOnline and AFSAT (part of MWEB Africa), which were acquired by Telkom in February 2007 and April 2009 respectively. The South African firm paid a total of ZAR774 million (USD85.5 million) for the combined assets. iWay’s retail footprint currently covers Kenya, Tanzania, Uganda, Zimbabwe, Namibia, Nigeria, Zambia and Ghana.
According to TeleGeography’s GlobalComms Database, during the twelve months ended 31 March 2012 iWayAfrica saw its revenues decline 10.9% to ZAR368 million, prompting Telkom to ‘rationalise’ the business. In its annual report Telkom acknowledged that an operational footprint covering Africa is desirable, but not at any cost to its core business.