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Alpheus Mangale, Seacom group CEO. Picture: SUPPLIED
Alpheus Mangale, Seacom group CEO. Picture: SUPPLIED

Seacom, one of Africa’s largest undersea cable providers, aims to grow its business in East and West Africa through acquisitions as part of a strategy to extend its connectivity business, while taking up market share with enterprise clients. 

With shareholders such as Sanlam and Remgro, the company sells internet data capacity on its networks to businesses, internet service providers and mobile operators on a wholesale basis.

Founded in 2009, it connects SA’s internet traffic to Europe via its eastern African undersea cable and holds about 25% of the wholesale fibre market locally, competing with firms such as Telkom, Vodacom and Liquid Intelligent Technologies.

Alpheus Mangale, Seacom’s group CEO, told Business Day that the company had the funding in place to push its expansion plans. He said the infrastructure side of the business typically grew through deployment of large capital expenditure (capex) projects.

“Whether it’s last mile connectivity that we connect our customers on to, we need capex to do that and that’s where the funding with the likes of the International Finance Corporation (IFC) and many other players that we’ll have in the future” came in.

In June 2023, Seacom received a $207m (R3.91bn) long-term loan package from the IFC, the World Bank’s investment arm. It included $70m from IFC’s own funds, $42.24m from a group of institutional investors, with $94.76m from Nedbank and Mauritius Commercial Bank.

The IFC specialises in financing private enterprise investment in developing countries through loans and direct investment. 

Drive business

“We’ll continue to develop strategic infrastructure in strategic routes across Africa ... one of our strategies is to grow via acquisition. We need funding to be able to grow and fund these strategic assets in each of the markets that we want to be in,” said Mangale, who took over from former Seacom boss Oliver Fortuin in April 2023.

“So we see the role of funders to be quite [important] in that context, and hence the deal that we announced last year with IFC. It allows us to be able to take that funding and drive our business appropriately. It also allows us to accelerate the development agenda for Seacom in Africa, either through acquisition, organic growth or building out of strategic infrastructure.”

As part of the expansion, Seacom has been making a number of investments in its quest to compete with the likes of Dimension Data and BCX in the enterprise market.

The group now consists of the traditional telecom infrastructure business and managed services for enterprise clients. 

“The other part of our business is services... That part of the business is capex light — we don’t need to deploy a large amount of capex to be able to deploy a cloud or service solution,” Mangale said.

He said funding would mainly be needed for acquisitions. “We expect that we’re going to be looking at assets in the market in SA, like we did with EOH, and in East Africa and parts of West Africa where we want to grow.”

Seacom has steadily grown according to this strategy in recent years. 

In October 2021, Seacom completed the acquisition of Kenya-based fibre operator Hirani Telecom’s network for an undisclosed sum, as part of its entry into that country’s enterprise space. Early that year, the company acquired certain infrastructure assets from Africell in Uganda, also to serve businesses in the country.

On the local front, Seacom signed a deal in April 2022 to acquire EOH’s Network Solutions and Hymax divisions for R144.9m. Both businesses provide networking and voice solutions in the telecom industry.

In August 2022, the company concluded an agreement with British Telecom (BT) to extend its enterprise IT business, to bolster its cloud, security and connectivity services.

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