African Communications Network Planned

BOSTON (06/05/2000) - The Canadian company African Sky Communications Inc. has been granted approval to sell its shares to private investors, which will provide enough money to fund a communication project in South Africa.

Under the proposal, African Sky will sell 3.4 million shares. The plan was approved by the Canadian Venture Exchange, which has tight investor-protection policies, and means that African Sky will have funds to open two TeleTrade Centers offering communication services in communities near Johannesburg. The company also will offer wireless services for private users.

The centers will offer services for Internet use, telephones, fax machines, copy machines, computers, videos and televised broadcasting. The services will be accessible to the community via a prepaid paper card with a set amount of minutes on it.

The prepaid cards will ensure that customers pay for services they've used, said Jeffrey Stanger, vice president of communications at African Sky.

Because many South Africans living outside of Johannesburg haven't been exposed to the Internet, African Sky is tying incentives to its new centers as a way to build customer enthusiasm, he said. Medical information will be available, teachers will be able to view lectures from around the world, and students could earn a college degree.

The objective is to offer services to people who can't afford communications costs as well as to those who want health and education services, he said.

South Africa has fewer than 12 main phone lines per every 100 people.

African Sky Communications also plans on planting wireless lines from the TeleTrade Centers to local residences and government offices, which users will also pay for through a prepaid card. The company is still working on the logistics of pricing, since lowering the cost of use if the business is not popular could be a risk, Stanger said.

However, Stanger said that the company is hopeful it will be successful, because Econet Wireless Holdings Ltd., which launched a similar community-based telecommunications center in Zimbabwe in April, has been ranked the fourth largest company in Sub-Saharan Africa, with a value of US$250 million.

The new African Sky centers will open in July and August.

African Sky, in Toronto, can be reached at +1-416-777-6826.

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