EXPANSION IN AFRICA
Huge eyes cross-selling after buying Connectnet and Sainet
Huge Group is eyeing cross-selling opportunities with its recent acquisition of Connectnet Broadband Wireless and its subsidiary, Sainet Internet.
The group could also use Connectnet’s relationship in some parts of Africa to expand into those markets.
Huge’s principal service is substituting fixed-line voice infrastructure, such as that provided by a public switched telephone network like Telkom, with a wireless global system for mobile communications.
Connectnet provides wireless connectivity to banks’ card payment terminals.
Sainet Internet markets and sells a variety of products and services including internet data, hosting services and website and system development.
Connectnet and Sainet Internet provide Huge with an entry into the data telecommunications and mobile payments markets and an opportunity to participate in the "expected explosive growth of the internet as it transforms from being a source of information to one focused on value and its movement", Duarte da Silva, Huge Group’s chairman, said in the group’s latest annual report.
The enlarged business of Huge "is building an investment theme focused on connectivity, mobile payments and financial technology", he said.
Huge Telecom has more than 14,000 clients, while Connectnet has 30,000.
Duarte said Connectnet was a highly cash-generative business, having paid dividends of R23m, R28m and R37m for the 2014, 2015 and 2016 financial years, respectively.
Sainet generated R35m revenue and R7.6m operating profit in the 2016 financial year.
Da Silva said Connectnet did not have a voice service to offer its small to medium enterprises and these customers provided Huge Telecom with a market into which to sell its voice service. "Connectnet has been searching for a voice service that it can offer its customers and so the commercial value of this base for voice services may be as much as R500m," he said.