Alan Knott-Craig Jr gets into the ISP game

Former Mxit CEO and current Project Isizwe head Alan Knott-Craig Jr has entered the internet service provider game. The serial entrepreneur today launched a new Wireless Internet Service Provider (WISP) aimed at bringing wireless broadband to homes and offices.

The new venture, called HeroTel, is meant to consolidate the local WISP space (which currently has more than 200 providers) and provide a viable last-mile broadband alternative across the country.

Right now the business’ site is scant on information, saying only that it “partners with Wireless Internet Service Providers (WISPS) around the country to help them become more profitable” and that the “ultimate goal is to make it easy for consumers to install broadband in their houses using partners in the HERO ALLIANCE”.

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Speaking to TechCentral however, Knott-Craig said that “South Africans need fast, reliable and affordable broadband and are increasingly looking for an alternative to ADSL.”

“HeroTel plans to consolidate the disparate regional wireless broadband providers under a national brand and unlock the economies of scale,” he added.

According to TechCentral, the company — which has the backing of former FNB CEO Michael Jordaan, former Rand Merchant Bank (RMB) CEO Mike Pfaff and former RMB chief investment officer Derek Prout-Jones — was formed following the acquisition of Snowball, based in Stellenbosch, and Cloud Connect, based in George.

Given the scale of what it’s trying to do, it should hardly be surprising that HeroTel has the backing of an investor consortium and a valuation of R200-million.

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According to Knott-Craig, HeroTel will offer a very different model to that used by tradional data providers:

“The old ways only make sense when the operator can generate revenue from high-margin voice calls,” he said. “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.

“The truth is that consumers want faster speeds and lower prices every year. Instead of fighting that demand, Wisps have figured out a way deliver the goods while 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.”

The company’s consumer offering is set to launch on 1 April next year. It will spend the time until then trying to consolidate the country’s disparate WISP providers.