On 25 August 2015, Alan Knott-Craig (Jnr) announced the imminent commercial
launch of HeroTel, a new Wireless Internet provider (WISP).
HeroTel will provide fast, reliable wireless broadband at affordable rates to
households and small businesses.
Over the last 13 years the lack of reliable fixed line options has birthed a thriving
industry of over 200 wireless internet service providers (WISPs) with estimated
combined annual revenues of R700 million.
Wireless broadband connections continue to grow at twice the rate of fixed lines,
highlighting a fast-growing market segment within an already booming industry.
HeroTel plans to consolidate the WISP industry in order to provide a single national
wireless broadband provider.
“South Africans need fast, reliable and affordable broadband and are increasingly
looking for an alternative to ADSL,’ says Knott-Craig. “WISPs already satsify this
craving with net profit margins reaching as high as 40%. However, due to the
fragmented nature of the industry the WISPs suffer from lack of coordination.
HeroTel plans to consolidate the disparate regional wireless broadband providers
under a national brand and unlock the economies of scale.’
According to Knott-Craig, HeroTel will differ from a traditional data network
provider, which employs the age-old methodology for network roll-out: high capex,
centralised control, proprietary technology. “The old ways only make sense when
the operator can generate revenue from high-margin voice calls. Pure-play data
networks do not have the luxury of selling minutes, which is why today’s data
networks continue to struggle to provide a suitable return on capital for investors,’
he says.
“The truth is that consumers want faster speeds and lower prices every year.
Instead of fighting that demand, WISPs have figured out a way to deliver the goods
whilst making a profit. HeroTel has taken the lessons learnt by WISPs to reduce the
cost of deploying and operating a telecoms network to a point where it is profitable
to provide fast, reliable, affordable broadband to the public.’
HeroTel was formed following the acquisition of Snowball, based in Stellenbosch,
and Cloud Connect, based in George, and is funded by an investor consortium
including former First National Bank CEO, Michael Jordaan; former Rand Merchant
Bank CEO, Mike Pfaff; and chief investment officer (CIO), Derek Prout-Jones.
“We are currently integrating our WISPs under a unified network and brand and are
scheduled to officially launch HeroTel for consumers on 1 April 2016,’ explains
Knott-Craig.
Knott-Craig will take on the role of executive chairman, supported by CEO Corne de
Villiers, COO Francois Wessels, CIO Imel Rautenbach and CFO Van Zyl Botha. Alan
remains CEO of Project Isizwe, a non-profit company which he founded in 2013 that
provides free WiFi to poor communities.
Prof John Volmink, chairman of the board of Isizwe, confirmed that the board has
approved Knott-Craig taking on the role of chairman of HeroTel and is excited for
the benefits that will accrue to Isizwe thanks to a strong commercial partner.
“HeroTel is not about building a telco from scratch. It’s about consolidating an
existing network of hundreds of wireless broadband entrepreneurs and aligning
them with a greater mission: Making it easy to get fast, reliable, affordable
broadband,’ says Knott-Craig.
For more information visit the HeroTel
website.
