June 14 (Bloomberg) -- IBurst (Pty) Ltd. is expanding Internet capacity beyond the capital of South Sudan, Africa’s youngest country, in a three-year plan to provide services to the nation’s government and biggest companies.
“By the end of June we will have a few base stations running in the Abyei region” to enable services, Thami Mtshali, chief executive officer of the South African provider of mobile Internet services, said in an interview at the company’s Johannesburg headquarters.
IBurst has four base stations in the South Sudan capital of Juba using fourth-generation systems, which allow faster downloads. The stations service Juba’s population of about 250,000 and coverage will extend to the whole nation in three years, said Mtshali.
“From nothing to 4G, that is what we’re doing to the place,” Mtshali said. “It’s an initial $20 million investment,” and iBurst has already signed up some customers in the regions in which it is expanding, where the biggest clients are government institutions and the military.
South Sudan is building infrastructure and institutions after gaining independence from Sudan last July. South Sudan seceded after a referendum on independence, the culmination of a 2005 peace agreement intended to end a two-decade civil war. The south kept three-quarters of the formerly united country’s oil output of about 490,000 barrels a day.
“We first identify the customer and then build the infrastructure after doing the agreements,” Mtshali said. Customer subscriptions immediately pay the company’s costs, he said. “Margins are very good out there, because there’s absolutely nothing in that country,” he said.
South Sudan has a population of 10.6 million and only 60 kilometers (37 miles) of paved roads, according to the CIA World Factbook. The government has a target for economic growth of 7.2 percent in 2012, up from 6 percent last year, according to the Factbook.
In Abyei, iBurst will enable “all the people to communicate and to have access to globally competitive technology this year,” Mtshali said.
Abyei lies in a contested border region, with Sudan and South Sudan both claiming sovereignty. The two countries’ militaries have clashed in the area, and the north sent in the army in May last year. The UN established an “interim security force” to maintain peace ahead of a planned referendum in which the population will choose which country they want to be part of.
While iBurst is rolling out infrastructure in South Sudan, the country is setting up a commission to regulate telecommunications, Khamisa Wani-Ndah, deputy minister of telecommunications and postal services, said in an interview in Cape Town on June 7.
As South Sudan doesn’t have a fiber-optic network, iBurst will rely in satellite connections for its rollout, said Mtshali. Within three years iBurst will cover the entire nation with 4G long-term evolution technology. “We have access to funds and we are always in talks with our backers,” he said.
The company also plans to put up 1,500 base stations using LTE technology in South Africa by the end of the year, and aims to reach a total of 4,000, Mtshali said in an interview this month. The first set of stations will cost $150 million, he said. IBurst has 100,000 data users in South Africa.
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