Telecommunications
The Altron telecommunications sector generated revenue of R6 billion and operating profit of R539 million in the review period, representing 35% of total group revenue and operating profit alike. Relevant regulatory changes in the South African telecommunications market during the year included the entry of a second fixed-line operator, the enactment of the Electronic Communications Act and the advent of mobile number portability between cellular operators. Advanced technologies from broadband, high-speed digital portal access and wireless connectivity to ADSL offer significant and broad-based communications opportunities for our group.
Altech Autopage Cellular, the largest independent cellular services provider in South Africa, increased its subscriber base to over 800 000 from around 700 000 the previous year. The rising proportion of hybrid connections (post-paid and prepaid) has reduced average revenue per user but this was offset by growing numbers of high-end corporate and fixed cellular customers. The company expanded its national footprint to over 150 stores, supplemented by its own and thirdparty distribution channels. Recent competitive price reductions from major operators will benefit Altech Autopage Cellular through greater penetration and use of wireless data services, while the acquisition of a licence to offer value-added network services will enable it to capitalisefurther on deregulation in the telecommunications sector.
During the year, Altech Netstar significantly increased its market share in stolen vehicle tracking and recovery and fleet management services in southern Africa and now has a subscriber base of over 381 000 users covering assets estimated at R48 billion. Altech Netstar concluded an empowerment transaction for its fleet management business with Nariku (Pty) Limited, wholly owned and managed by black South Africans and headed by Altech non-executive director Dr Enos Banda, which purchased an effective 25% equity interest in Altech Netstar Fleet Management Services. In line with its globalisation strategy, Altech acquired an effective 50% joint controlling interest in Altech Netstar’s franchisee in Malaysia where some 29 000 vehicles are currently fitted with Altech Netstar vehicle tracking units.
Altech Alcom Matomo’s roll-out of the R540 million digital terrestrial trunked radio (Tetra) network for Gauteng South African Police Services is expected to be completed during 2007. The company has targeted several African countries as export destinations for its products and anticipates its new empowerment shareholder, Platina Venture Holdings (Pty) Limited, headed by Altron nonexecutive director Dr Penuell Maduna, to add significant value. Altech Alcom Radio Distributors performed well during the year and remains the leading distributor of Motorola twoway radio products for Africa and the Middle East via a network of authorised dealers.
The performance of Battery Technologies in the Powertech group reflected improving demand in the telecommunications sector, especially in Africa. Battery Technologies (Nigeria) Limited was established towards the end of the period to capitalise on business opportunities in the Nigerian market and neighbouring east African countries. Renergy Technologies, a Powertech renewable energy operation, performed exceptionally well following improved demand and the introduction of new products and system solutions. Effective 1 February 2007, Altron and Reunert combined their telecoms cables operations in a new joint-venture company, CBi electric Aberdare ATC Telecoms Cables, and integrated Aberdare subsidiary Lambda Cables as a division of the new company. In its first month of operation, CBi electric Aberdare ATC Telecoms Cables performed above expectations and is well on track to becoming Africa’s leading manufacturer and supplier of copper and optical fibre telecommunications cables.