Acquisitive Huge Group says market turmoil could throw up opportunities

Managed telecommunications firm, the Huge Group, sees potential for plenty of acquisitive and organic growth,
despite the current market turmoil, executive chairperson Anton Potgieter said last week.

Potgieter, who was formerly CEO, told Engineering News during a telephonic interview that companies that were
prepared to look around could pick up a few good bargains in light of the market turmoil.
He explained that Huge had some promising deals in the pipeline before the credit crunch started, which forced it
to pull back from some of those negotiations.

"We are getting them back on track now," he commented, adding that the credit crunch had put small and big
players in the telecoms and information and communication technology (ICT) sector on a "bit of an even playing
field".

This meant that all players now had equal opportunities in making acquisitions, if they were willing to look around
and do the maths on potential opportunities.

The group would focus its acquisitive attention on the ICT sector for now, as it had the skills base in place for the
sector.

However, Potgieter noted that the group's vision was to move into other sectors in the longer term.
The company would, however, first have to build up the intellectual and skills base to move into other sectors, he
explained.

The Huge Group was specifically looking for acquisitions in the mobile media and mobile messaging space, as there
was a lot of scope to grow in that area, said Potgieter.

"The gold rush in that space has not even begun yet," he commented.

Potgieter said its acquisition of 25% of mobile advertising company Eyeballs, in April, was a perfect example of
what the group was looking for.

He asserted that there was potential organic growth through its Eyeballs subsidiary, but that there was also a
number of companies in the area that were fledgling enterprises and could make very good acquisition targets.

Further, the group would also look at acquisitions in industries closely related to telecommunications.

It would, for example, put a lot of effort into preventing the acquisition of the remaining 59% interest in cellular
service provider iTalk Cellular by MTN, which already held a 41% stake in the company.

The Huge Group also had formerly expressed an interest in buying the 59% stake in iTalk, however, MTN had a
preemptive stake in acquiring the balance of the company.

The Competition Commission had recently cleared the acquisition of iTalk by MTN, but Huge would take the matter
to the Competition Tribunal.

The group believed that the transaction would hamper telecommunications competition in the country.

Potgieter said that the report by the commission had left a lot of questions unanswered about the acquisition, which
would hopefully be brought up in detail in front of the tribunal.

"We remain bullish on that opportunity," he said.

COUNTRIES OF INTEREST

Meanwhile, Potgieter said that the group would certainly look at acquisitions and organic growth in Africa, but more specifically in Southern Africa.

While there were not many countries outside South Africa that required the level of services its managed
telecommunications services could offer, it would focus more on acquisitive and organic growth in the areas of
mobile messaging and mobile advertising.

He noted that its focus for the Eyeballs subsidiary would be very much global, as it was an international player. He
expected opportunities in this regard to start unfolding early in 2009.

Meanwhile, the corporate managed telecommunications service offering had a lot of organic growth potential in
South Africa.

Potgieter said that this business was very much "recession proof", as corporates were unlikely to cut their usage of
communications during tough economic times.

He noted that companies would rather reduce all other expenses, but not spend on communications, as this was
directly related to sales performance.

Further, he said this business had been growing at 25%, without a specific sales drive.

POSITIVE NEWS

Meanwhile, Potgieter noted that it was likely to benefit indirectly from the High Court's decision to reject the
Minister of Communications' appeal against the Altech Autopage Cellular deal.

Altech and other value-added network service licensees were now allowed to convert their licences to individual
electronic communications network service licences and self-provide.

Potgieter explained that while the Huge Group would not build its own networks, the judgement would "spark
general momentum" in the industry.

With more competition in the market, and the market becoming more complex, the group, which provided
management services for the industry, would benefit.

It would become more important in taking away the complexity for its clients.

By: Chanel Pringle