Thank you for receiving us Mr. Dos Santos. It is an honour to be speaking to someone who has contributed so much to bringing the internet revolution to Angola. Could you start by giving us a brief history of the creation of Sistec and the main stages of its development?
Sistec was created as a result of the split up of Protecnica. Protecnica was created in 1981 and was the first new private company to be created in Angola after independence. At the time we were the agents for Mitsubishi vehicles, Racal radios and introduced micro computers for the first time in Angola.
In 1989 the country started moving towards a free market economy. Protecnica's three partners had differing views on how to manage the company in free market environment. We decided to split the company into three parts and Sistec was created out of one third of the capital keeping the office equipment and computer divisions of Protecnica.
Sistec was officially launched on 1 July 1991. Our paid out capital was $1,5 million and we had about 22 employees. At the time I owned 100% of the company and decided to open the capital to all its Directors. I believed that the future of the company lied in computers and software. We were importing parts and assembling PC clones in Angola but our price was only a fraction cheaper than well known branded PC's from abroad so we decided to stop that activity and become agents for Gateway 2000. As soon as we did that our sales increased threefold.
In 1993/4, forecasting that the computers and entertainment markets would converge, we decided to open the home division of Sistec to sell TVs and other consumer electronics. We became the agents of Philips in Angola. We also started to assemble our own TVs and radio sets with solar panel charging systems.
Our assembly plant has a surface area of 2000 square meters. Apart from TV and radios it includes an oven assembly line and some other additional services. We also have an 8000 square meter warehouse.
We have invested in our infrastructure by opening offices all over the country. We have also invested in our personnel because they are the people who make the company's success. We now have close to 200 full time employees nation-wide and another 100 part time workers.
When was your first experience of the internet in Angola?
In 1995 using Compuserve service through SITA at a very low debit speed. We immediately created our home page, making Sistec the first Angolan organisation to be present on the internet.
Before that we played around with the FIDONET system with Inmac 300bps modems and we developed some data transmission software working with CP/M-Zilog Z80 processors - do these count ???
Where was your site hosted?
By a company based in Porto, Portugal. They developed our home page. In 1996 we applied for the license to set up Net Angola, a web design company / ISP and started training our personnel to work on LINUX.
How challenging was it to train your personnel in this field?
We hired one Angolan technician that was at university in Portugal. When he came back he started training the rest of the personnel.
How many companies applied for ISP licenses at the time of Net Angola's creation?
Nine companies applied for an ISP license. Only 3 started real work and are still in the market today. At the time we bet that web design rather than internet access was where Netangola's growth would come from. One of our competitors saw this with a different eye and concentrated on providing access to the internet. They were right, we were wrong. Nobody knew the use of the internet so how could we sell them homepages? As from the second semester of 1996 we also decided to concentrate on access.
By then you were 6 months behind your competitor in the race for subscribers. How did you develop your comparative advantage?
Sistec already had a very big name while our competitors were unknown. We were also offering very competitive prices. At the time our competitors were charging $110 / month unlimited use, our introduction price was $50 and later $35. Price and the Sistec brand were the key to making the difference.
At what rate are subscriptions growing?
We currently have 3000 subscribers and we are adding 10 new ones per week. We also have 38 clients serviced by a combination of a 4 megabits wireless system and dedicated lines.
What is Net Angola's share of the Angolan ISP market?
We estimate our market share at 40%.
Who are your main clients using dedicated lines?
Large hotels (Méridien Presidente, Hotel Contiental etc.), the Government and the national media companies (ANGOP, Television Publica de Angola, Radio Nacional de Angola).
We installed a shared POP in Lubango, outside Luanda, to allow users to dial into our server on a local number. Currently Angola has shared POPs in Luanda, Lobito, Benguela, Lubango and Cabinda. While we were installing these POP's I thought: why not install shared POPs (I called them sub ISPs at the time) all over the place because the hardware price is small in comparison to what you can get. So I went to sell them to the hotels. | Since then we have developed a roaming software that controls shared POPs. It can be adapted to the needs of cyber cafes, small affiliate servers, airports and hotels.
What is a shared POP ?
As there is not enough demand outside Luanda to justify a POP for each provider, all working ISPs agreed with the National Post and Telecommunications company to create shared POPs allowing all users of all ISPs to log in through a local number in each of the above towns.
Sistec recently took over CCA, a telecommunications company based in Atlanta, USA. Does this take over relate to the development of shared POPs software?
Absolutely. Technically speaking we could sell this services from anywhere in the world but to market it to clients the world over I need to do it from a company which is well established in a safe country. Therefore we are marketing this service through CCA's existing set up and have increased personnel and customer service. Another reason why I chose America is because band width is 20 times cheaper in the US than in Angola.
What is your investment in CCA?
$1,5 million. In fact, we used to represent CCA in Angola. 80% of Angola's transmitters are made by CCA.
In the sequence of overall business we had made a $1.000.000 down payment on a big transmitter but then CCA filed chapter 11 bankruptcy. We were invited to take over the company and in the end it worked out less expensive to do that. We then proceeded to re-orientate CCA's focus on the shared POP software we have spoken about. We also discussing updating/expanding our radio transmission hardware to digital transmission technology using the 'Ubiquity' standard. As we know, in future the radio and the internet will be closely connected.
To sum this up, CCA's activity is now upgraded to provide Internet access but with added special services no one else is providing such as the shared POP software programmes and the ISP affiliate program. Tests will be carried out through April this year and we hope to start service in May. In fact, we have been using Netangola, our Angola based ISP company, as a real test lab for our new software before installing it in the USA.
Coming back to your activities in Angola. What are your plans in the internet part of your business?
We are one of the four companies applying to the government for a V Sat licence to transmit voice and data to Angola and beyond. We will have a maximum capacity of 400 terminals which we hope to reach within two years.
What proportion of the market does that represent?
30% if the market keeps its existing size.
Is this your largest new investment in Angola at the moment?
No. We have invested most of our profits in our fixed assets because we forecast that rents will start rising sharply and it will be very difficult for companies to survive in such conditions. So we are buying land and building new headquarters which will also include the company's social club as well as between ten and twenty business outlets and two cinemas. The cinemas are closely related to what we are doing on the internet side. We are tying to negociate content with content providers, so hopefully the cinemas will be a way to distribute 'A movies' in Angola and, should the licences permit it, through the internet as well.
To finish off, what final message would you like to send to our readers?
The final point I wish to make concerns the way the Angolan government behaves towards businessmen. At present, due to our communist heritage, the so called 'pro forma invoice concept' still exists in Angola. At the time of central planning this was an advantage because we did not have to do any marketing. Our market was defined by the ministry of planning, we supplied them with their needs and sent them a pro forma invoice. It is necessary to change the pro forma invoice system to a so called quotation system. Tax resident companies in Angola must be given the orders of any organisation consuming goods and services in Angola whether they are private companies, the Government, Non-Governmental Organisations, the United Nations or the large oil companies.
For example if the United Nations, an NGO, or a foreign oil company imports computers to Angola they go through a system in which the government does not charge the full import duty on these computers. If we want Angolan companies to grow, it is necessary that the tax resident businesses in the country provide Angola's consumers with goods and services. NGOs should not import directly from abroad through non resident representation offices of foreign companies. They should be buying through Angolan tax resident producers and importers, helping them increase the government's fiscal revenues, create jobs and increasingly produce locally instead of importing. |
