In an unexpected move, Dimension Data’s Internet Solutions (IS) is getting into the retail consumer Internet market. IS said on Friday that it is acquiring Internet service provider MWeb Connect for an undisclosed sum.
The acquisition, which is being done through Dimension Data, is surprising given that IS has in the past shown little interest in serving the consumer market directly, preferring instead to focus on corporate customers and small and medium enterprises.
Dimension Data is buying the business from MultiChoice, a subsidiary of the JSE-listed technology and media giant Naspers.
The proposed deal follows the announcement in 2014 that IS would buy MWeb Business as well as the core assets of the MWeb ISP business and Optinet. At the same time, the parties announced a new joint venture called WirelessCo — now Vast Networks — to build and operate an open-access, carrier-grade Wi-Fi network.
IS said in a statement on Friday that the new transaction is expected to be completed in the first quarter of 2017. It is subject to regulatory approval, including the approval of the Competition Commission.
“MWeb is one of South Africa’s largest consumer ISPs and this acquisition will immediately give Internet Solutions a presence in the large and rapidly growing consumer market,” said IS MD Saki Missaikos in the statement.
IS has provided few clues as to why its strategy has changed. But Missaikos said: “We believe that broadband has the power to reshape the world in which we live and work. It offers faster and more dynamic ways of doing business, and is playing a critical role in improving the provision of services for consumers across many sectors such as education, health, transport and social services.”
The deal, if it gets shareholder and regulatory approval, will mark the end of an era for MWeb, which was founded almost two decades ago as a provider of dial-up Internet access. Today, it has about 325 000 customers. — © 2016 NewsCentral Media
