On 15 July 2010, Nippon Telegraph and Telephone Corporation (“NTT”) Dimension Data Holdings plc (“Dimension Data” or “DiData”) announced that they have reached agreement on the terms of a cash offer to be made by NTT for 100% of Dimension Data. The offer, totalling approximately GBP 2.1 billion (R24.4 billion), was unanimously recommended by both Boards of Directors.

NTT, one of the largest global telecommunications service providers in the world, has limited presence in certain emerging markets where Dimension Data is very strong, specifically Africa and the Middle East. The transaction is a huge vote of confidence in DiData, South African and Africa, and the rationale of both parties is to capitalise on the significant growth opportunities that are unfolding.

Andile Ngcaba, Chairman of Dimension Data’s Middle East and Africa business (“DDMEA”), as well as of its minority shareholder Convergence Partners, is excited about the deal and how its positions DiData in this region. “With access to the resources, products and R&D of the NTT Group, DDMEA is better positioned than ever to grow its presence and capitalise on new and fast growing market opportunities, such as cloud computing. The deal is great for the country and the company”.

See attached press release

The second instalment in our regular feature to introduce key executives from across the Convergence Partners investment portfolio. Bertrand is the Managing Director of Gemalto Southern Africa (Pty) Ltd. Gemalto is the global leader in digital security, providing secure personal devices, platforms and services to governments, organisations and businesses.
Before being assigned as MD in Johannesburg, Bertrand was in charge of Product, Solutions and Services group for the Secure Transactions Business Unit (€450m) with teams based in Europe and in Asia. Here in South Africa, Bertrand manages all Business units (Telecommunications, Secure Transactions and Government) as well as Operations for Southern Africa. This business comprises around 400 people with a turnover of approximately €80m.

See below Questionnaire:

Name?
- Bertrand Knopf

Company?
- Gemalto

Position?
- Managing Director of Gemalto Southern Africa (Pty) Ltd

How long have you been with the company? Tell us about your background?
- 15 years; I have been handling several positions mostly in sales, marketing and management; before my assignment in Johannesburg, I was in charge of Product, Solutions and Services group for the Secure Transactions Business Unit (450m€) with teams based in Europe and in Asia; here in South Africa, I manage the business for all Business units (Telecommunications, Secure Transactions and Government) as well as Operations for Southern Africa. It is around 400 people and a turnover of approximately 80mEuros.

What are your key skills that you bring to the job?
- I bring my knowledge of the company and of the business, and working actively on propagating. Gemalto values across the board: customers, people and innovation.

What has impressed you about Gemalto?
- Gemalto commitment to innovate and deliver secure personal solutions to ease the life of everyone. We are delivering more than 1,5 billion secure devices every year (much more than any handset or PC maker) and we are involved in many various projects such as Mobile Money with MTN (peer to peer money transfer through mobile phone), contactless payment cards roll out with banks, issuance of secure personal documents such as electronic ID or biometrics passports with governments…

How do you see your industry changing in the next 5 years?
- The industry will definitely evolve into more convergence between different sectors like Mobile and Payment or like Payment and Transport. Convenience and security will be at the heart of any solution or service to be brought to the end-users by Telecom operators, Banks, Transport authorities or Governments. Differentiation will come through value added services to the end-user.

How have you found working with Convergence Partners?
- Respect and confidence in the relationship

What are your personal interests/hobbies?
- I care a lot about my wonderful wife and kids and enjoy spending time with them; otherwise I like playing tennis and golf, and I have a strong appetite to travel and discover new cultures.

Blackberry vs. iPhone? Other?
- No blackberry; no iphone yet (I left it to my wife…)… but an other pda…..

Mac vs. PC?
- PC as it is the standard at Gemalto

Inala Technologies and Convergence Partners Chairman, Andile Ngcaba announced the appointment of Executive Director, Laurentius Human, as Chief Executive Officer of Inala with effect from June 2010. The company, which has grown into one of Africa’s leading Telecommunications and Broadcast systems providers over the past 14 years, is currently represented in 17 African countries and is poised to expand into India, South America, the Middle East, and Turkey.

Human is well known in the technology sector in South Africa and Canada. He brings a wealth of local and international business experience and will provide stewardship to Inala through the next phase of its growth and international expansion.
Ngcaba said the current CEO, Braam de Villiers, would remain active in the company and continue to develop the company’s international business interests and assist in its global expansion.

See attached link

Conclusion: The African communications growth story can no longer be viewed as a frontier opportunity as more and more players from developed markets enter the African market.

Rather, the market is showing signs of greater maturity reflected by, amongst other: (i) increased competition; (ii) reducing gross margins; (iii) declining ARPUs; (iv) greater complexity of product offering and mobile payment services; (v) active attempts by incumbent mobile and fixed-line operators to expand into other parts of the value chain; and (vi) the emergence of infrastructure sharing models. While subscriber growth remains superior to other regions, with significant pent-up demand remaining, these changes in the communications landscape is forcing operators to rethink their strategies and focus on the next wave of growth.

Significantly, there have been a number of major developments that will catapult the African communications market into another league from both a cost and bandwidth perspective. These include the arrival of new international submarine fibre optic cables such as Seacom connecting the East African seaboard to international submarine fibre networks and the accelerated liberalisation of African communications markets.

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Dimension Data Middle East & Africa has acquired a 51% stake in Telcom (Morocco), representing a further step in the establishment of a strong presence across the continent. Telcom will be rebranded Dimension Data Morocco.

View the full Statement

African Satellite Program will Launch Intelsat New Dawn by Late 2010

Pembroke, Bermuda, and Johannesburg, South Africa, 9 December 2008.

Intelsat, Ltd., the world’s leading provider of fixed satellite services, today announced a joint venture with a South African investor group led by Convergence Partners that will utilize project financing to build and launch a new satellite into the 33 East orbital location, ideally positioned to serve the African continent. The satellite, to be called “Intelsat New Dawn,” will feature a payload optimized to deliver wireless backhaul, broadband and television programming to the continent and is expected to enter service in early 2011. The satellite will be operated and marketed as part of the global Intelsat fleet.

Africa has been one of the fastest growing regions for fixed satellite services in recent years, fueled by demand for critical infrastructure from communications providers and television programmers. Wireless telecom operators, broadband service providers, corporate network service providers and direct-to-home television operators have experienced growth along with the economic development of the region. The New Dawn joint venture was established to provide solutions for African communication needs, and is expected to deliver new capacity for voice, wireless backhaul, Internet and media applications.

View the full Statement

Convergence Partners increases exposure in digital media market; takes 25.55% stake in South African online gaming business SkillPod Media

9 September 2008 – Convergence Partners Investments, a Black Economic Empowerment investment company focusing on the Technology, Media and Telecommunications sector, today announced that it had taken a 25.55% stake in SkillPod Media (SkillPod), a pioneering South African online casual gaming company.

Established in 2003 by Mark van Diggelen, SkillPod began developing a dynamic proprietary content management system for online games. Over the past five years, the company entrenched itself as a major player in the South African market whilst concentrating on developing world-class supporting systems. A major differentiator for SkillPod is their ownership of the games’ source code that they purchase thereby allowing them to create a turnkey solution for clients including branding and customisation. This has seen them successfully develop games to support marketing campaigns for a number of well-known brands including OUTsurance, KTV and Golf Digest.

The transaction will see SkillPod issue new shares resulting in Convergence Partners owning 25.55% of SkillPod while the existing shareholders, Mark van Diggelen and Brabys Media Holdings, will jointly own the remaining 74.45%. Brabys is a long-established specialist business directory publisher and owner of brabys.com and Ananzi.com.

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Convergence Partners Investments, a Black Economic Empowerment investment company focusing on the Technology, Media and Telecommunications sector, announced today that it had taken a stake in Integrat, a major South African Wireless Applications Service Provider (WASP) Aggregator with related interests in digital content, online platforms and other ancillary activities.

WASPs are companies that connect to the cellular operators to provide services to the networks’ clients, usually in the form of premium-rated Short Message Services (SMS). As an Aggregator, Integrat supports its WASP customers with best-of-breed, locally developed, solutions offerings to seamlessly connect into SA’s highly regulated mobile networks in a matter of days, rather than months. Integrat’s offerings are globally competitive and have evolved over the years to include various Value Added Services, such as content manager, campaigns manager, mobile payment systems and other mobile handset-focused services. These products allow customers to deliver services within a very short time and without having to take responsibility for any development.

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The funders, Nedbank Capital and Makalani Holdings Limited, have committed to contribute R125m and R75m respectively. This brings Convergence Partners’ total capitalisation value to around R600m.

The funding has been structured by way of a drawdown facility in the form of redeemable preference shares repayable in seven years. This allows Convergence Partners to invest equity into new projects and transactions but also into the refinancing of existing transaction structures. Convergence Partners will continue to leverage further on its equity injections into future transactions on a deal by deal basis.

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The introduction of innovative pricing models has opened previously untapped markets.  This expansion is accompanied and supported by convergence, liberalisation of policy environments and rapid technology changes. The maturing of some markets has seen reduced revenue per user, but these are being offset by increased volumes, revenues and higher-end broadband offerings.

A few major international and regional players dominate the market, with significant corporate activity a strong feature.

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