Internet service provider Afrihost is at an advanced stage of talks to acquire rival Axxess DSL, TechCentral has learnt from a well-placed industry source.

Afrihost CEO Gian Visser confirms that the company is in talks to buy the entire share capital of the Port Elizabeth-based provider of fixed-line broadband solutions.

The deal will dramatically expand Afrihost’s customer base. Axxess has about 35 000 monthly contract subscribers and tens of thousands of prepaid customers who buy the company’s broadband vouchers. Afrihost has about 55 000 contract customers.

Visser says consolidation in the highly competitive Internet service provider market in SA is inevitable and he believes Afrihost’s acquisition of Axxess will be the start of a trend in the industry. He expects the deal to be finalised by early August.

The acquisition, he says, will give Afrihost greater economies of scale. Though the two brands will continue to coexist after the deal, the idea is that over time the companies will operate on a merged platform. The management of Axxess will remain in place and no retrenchments are planned. Both companies provide bandwidth to customers on Internet Solutions’ backbone.

Former Internet Solutions CEO Angus MacRobert, who acquired a minority equity stake in Axxess last year, will become a small shareholder in Afrihost once the deal has been concluded.

Visser says the deal does not require the approval of the competition authorities. The value of the deal is not being disclosed. — Duncan McLeod, TechCentral