ICT infrastructure-focused private equity manager Convergence Partners is pursuing new initiatives and transactions, including exciting deals in the tech space. SAVCA speaks to Chairman and Founding Partner at Convergence Partners, Andile Ngcaba (AN).

What have been some of the interesting deals you’ve been working on in the past 12 months?

AN: We have continued to see a large number of investment opportunities, which have been a combination of exciting technology innovation and new infrastructure projects.

Most recently we announced the launch of the Comsol national network, which provides high-speed enterprise-grade broadband using regulated radio frequency spectrum. This will provide fibre-like connectivity with the added advantage of rapid deployment in areas where the economics of fibre are more challenging, as well as providing redundancy to existing fibre deployments.

We have also invested in a number of innovative technology solutions with local IP that is scalable and being globally exportable, most notably Snapt, e4, HealthQ and inQuba. In expanding broadband access and services across sub-Saharan Africa, our regional platform Synergy Communications continues to grow its portfolio of enterprise-facing ISP assets.

How has your capital raising of R2,5bn contributed towards Africa’s ICT infrastructure? Are there other capital raising exercises you are currently working on that you are willing to share with the public?

AN: The Convergence Partners Communications Infrastructure Fund (CPCIF) is a specialist fund that makes investments that extend the reach and improves the quality of ICT in Africa.

The capital we have to deploy is applied to improving the ICT infrastructure and deepening the technology base of the continent, with investments in the broadband infrastructure and services layer.

The result of this is improved access to quality and more affordable broadband. Having closed CPCIF in 2015, the primary focus is on capital deployment and portfolio management.

What are the prospects for the ICT industry in South Africa and /or sub-Saharan Africa over the coming decade? Are we likely to see investor appetite grow?

AN: The African continent continues to offer significant growth opportunities in the ICT sector. This is due to the deficit in ICT infrastructure especially when compared to other emerging and developed markets.

Even though there has been significant progress in improving and increasing the reach of communications infrastructure, a need remains to improve the quality of the networks and services on offer. As a specialist fund manager we see this is an opportunity to unlock potential and value of existing and greenfield assets.

Furthermore, at Convergence Partners we are focused on keeping abreast with developments on 5G, even though these are 3-4 years away from being implemented. However, the preparations for this technology change are underway and it is critical that we understand how 5G will connect everything, especially on the African continent.

A number of the key investments we have made and are considering (including fibre, wireless and services) are in anticipation of the opportunities that 5G will bring. Therefore, we keenly are following developments in forums such as 5GPP, International Telecommunications Union (ITU), Institute of Electrical and Electronics Engineers (IEEE) and many other organisations involved in the 5G standards setting and technology development process.

A key milestone in this process will be the World Radio Conference to be held in 2019 (WRC-19) which will be presented with recommendations on 5G, and hopefully agree the way forward for the implementation of this technology platform. We expect this technology to be a key driver of the much anticipated Internet-of-Things revolution.

Based on the above, we anticipate that there will be a significant need for additional funding to realise this future. We see increased appetite by both domestic and international investors in the sector to meet this demand for capital. Currently this need is primarily funded by the private sector and in our considered view this trend will continue.