Cape Town-based internet service provider, Web Africa has sold a 30% stake to the Smartcom consortium, specialised distributors of pre-paid and contract voice and data services in the mobile environment.  The deal was approved by the Competition Commission and is expected to enable both companies to introduce a broader offering to their customers, expand their subscriber bases and enhance their customer service levels.

According to Matthew Tagg, MD of Web Africa, the agreement offers the ISP the opportunity to launch its own network, enabling a higher level of service.  “It is critical that we maintain our service levels as we grow, and the partnership will facilitate this,” he says.  “In addition, it will position us well to respond to the convergence trend, and enable us to create a converged platform for our voice and data customers in the future.”

Smartcom, and its sister company Smartcall, were originally established in 2000 and 1998 respectively as exclusive service providers on the Vodacom network.  Those businesses ultimately became subsidiaries of Vodacom, but in 2007 the original management team re-established Smartcom and Smartcall as resellers.  In one year, Smartcall has gained over  1 million prepaid subscribers, while Smartcom has established 45,000 contract customers, mostly small and medium enterprises. 

According to Nick Zografos, MD of Smartcom, the synergies between the companies extend to their approach to the market and internal culture.  “We are both driven to grow our businesses and have proven success in launching new and innovative products and solutions,” he says.  “Being young, dynamic and nimble, we also share a similar company culture.”

Web Africa has also recently reached some important milestones.  It has acquired 30,000 subscribers and employed its 100th staff member.  The ISP is also known to be the second largest web hosting company in South Africa, and is estimated to account for about six percent of Telkom’s ADSL business.

While Web Africa will maintain management control, it will draw on Smartcom’s extensive experience to support its expansion drive.  The companies will also leverage economies of scale to provide a competitive offering to the market.

“This is a good move for Web Africa and our subscribers who can look forward to a greater range of products and a higher level of service,” says Tagg.