Friday, May 04, 2007

Surfing the imminent Digital Tsunami

The definition of synergy is: cooperative interaction among groups, especially among the acquired subsidiaries or merged parts of a corporation that creates an enhanced combined effect.

I had mentioned in a previous post that Trans-Century (a private equity firm) had bought out Wananchi Online. Business Daily reports that EA Cables is to shift production from the traditional copper cables and aluminum conductors to fibre optic cables.

This would not be news apart from the fact that there is a common denominator between Wananchi Online and EA Cables - Trans-Century has substantial shareholding in both entities.

What is the implication - Synergy. The production of fibre optic would lay the physical infrastructure for Wananchi Online and Seven Seas Technologies (yet another one in the Trans-Century stable). This is strategic investment. Trans-Century bought into KPLC so as to provide a ready market for its traditional cables.

However the digital tsunami is coming and it looks like Trans-Century has unwittingly stumbled into the future. The combination of the companies they have invested in (Wananchi, EA Cables, KPLC and Kengen) has a common future technological thread. Once you figure this out then you will definitely get startled.

Of course there are other predators lurking in the nascent labyrinth of our ICT sector, remember Safaricom? More IPO's are inevitable. Mergers, leveraged and management buyouts and other kinds of jostling are in the offing.

There is a proverb that is apt for this current situation:

Every morning in Africa, a gazelle wakes up, it knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up, it knows it must outrun the slowest gazelle or it will starve to death. It doesn't matter whether you are a gazelle or a lion. When the sun comes up, you better start running.

To paraphrase: when that cable hits Mombasa you better run for your life whether you are a lion or a gazelle in the Kenyan ICT forest - coz it will be a no holds barred contest where all kinds of tactics will be witnessed, including infanticide.

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