International Datacasting Corporation Signs Agreement with The Wananchi Group for New Direct-to-Home Broadcasting Service Value
OTTAWA, ONTARIO--(Marketwire - June 30, 2010) - International Datacasting Corporation (TSX:IDC), a global leader in providing advanced solutions for the distribution of broadband multimedia content, announced today that the Company has entered into an agreement with The Wananchi Group for the development, build up and roll-out of a new direct-to-home broadcasting service that will provide television programming to the Sub-Saharan region of Africa.
The contract includes head-end equipment, valued at approximately US$3,500,000 and will enable a satellite-to-set-top box distribution platform for the delivery of a secure broadcast system to homes throughout the subject region.
IDC will also serve as a system integrator and project manager on the deployment of the consumer level set-top-box utilizing technology from a number of leading vendors to facilitate the deployment to the home. Phase I of this project will include the delivery of a combination of STB1010Z and PVR2020Z set-top-boxes up to a total of 100,000 units over the next 18-months, valued at up to US$12,500,000.
While margins on these systems projects are lower than in IDC's satellite equipment segment, the larger anticipated revenues combined with expected lower operating expenses associated with this stream of business are currently expected to offset the margin impact. IDC anticipates that the overall project will be accretive to the IDC business as well as EBITDA positive.
The combined value of the agreement to the end of Phase I is valued at up to US$16,000,000. The agreement also contemplates a Phase II and Phase III product requirement consisting of an additional 100,000 customer premises units for each of these subsequent Phases, subject to Wananchi's requirements, over a three year period. The project has been funded in part by Export Development Canada (EDC) and East Africa Capital Partners (who have funded the development of The Wananchi Group).
The Wananchi Group is launching the first triple-play network in the region under the Zuku consumer brand which brings video, voice and data services to consumers in the area. Earlier this year, The Wananchi Group announced an agreement with SES World Skies to secure three full transponders on the new NSS-12 satellite for the launch of their DTH line-up and VSAT delivered IP based communications, which will further expand their broadcast reach in the region.
"I am very excited about being able to demonstrate our ability to provide an end-to-end solution on a global scale to a rapidly growing customer and industry base," said Frederick Godard, IDC President and CEO. "Although this is the largest project of this nature that we have been involved with, this is not new work for us. IDC has been doing systems and service work of this nature as part of its ongoing business activity. This contract allows us to leverage our years of experience and expand it on a larger scale. We are marketing our systems integration and project management expertise to a broader customer base around the world as the IDC Services Group which places us in a strong leadership position in the broadcast services market," he added.
"We are proud to be associated with IDC. Their outstanding reputation and their breadth of experience with similar projects led us to IDC as we build our network and broadcast facilities," said Richard Essex from East Africa Capital Partners. "The first phase of this project will see us delivering programming by November of this year and we are anxious to get started," he added.
About International Datacasting Corporation (IDC):
International Datacasting Corporation (TSX:IDC) is a global leader in providing IP-based datacasting solutions and systems for the distribution of broadband multimedia content. IDC has a broad portfolio of advanced technology products marketed under the names SuperFlex, Datacast XD, Tiernan, Logic Innovations and PROFline for implementing a wide range of satellite and other broadband content contribution and distribution networks. IDC's products are in demand for radio and television broadcast networks, distance learning, digital satellite news gathering and sport contribution, digital signage, digital cinema, IPTV distribution and other content distribution applications. IDC is headquartered in Ottawa, Canada, operates in Europe through its wholly owned subsidiary PROFline B.V. in Arnhem, the Netherlands and in the US through its operations in San Diego, California. The Company is in international in scope with installations in over 100 countries worldwide, has regional sales and service offices in Australia, Singapore and China as well as an established international network of value-added partners and distributors.
About East Africa Capital Partners
East Africa Capital Partners (EACP) is a technology, media and telecommunications sector focused Venture Capital Fund Manager investing in the greater Eastern Africa region. EACP have raised the ATMT Fund 1, LLC, which is a US$ 100m Fund targeting investments that will service infrastructure bottlenecks in the ICT sector in Eastern Africa. The Fund was made possible through a commitment of US$ 50m from OPIC (The Overseas Private Investment Corporation of the US Government) with the rest being provided by a variety of private equity investors. EACP are now in the process of actively investing these funds in the region.
This press release contains forward-looking statements, including statements about the expected revenue, EBITDA and margin impact of the Wananchi Group project that may involve risks and uncertainties. Actual results may differ materially. Factors that might cause actual results to differ materially include, but are not limited to, competitive developments, risks associated with IDC's growth, any difficulties with integrating acquired product lines into IDC's business and/or manufacturing procedures, any difficulties or disputes with IDC's subcontractors, contract manufacturers and suppliers, the development of the satellite datacasting market, regulatory risks, intellectual property infringement and other factors. IDC assumes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof except as expressly required by applicable law. Forward-looking statements are provided to assist external stakeholders in understanding IDC's expectations as at the date of this release and may not be appropriate for other purposes. More detailed information about potential factors that could affect IDC's financial and business results is included in the public documents IDC files from time to time with Canadian securities regulatory authorities and which are available on SEDAR at [ www.sedar.com ], including, without limitation, IDC's Annual Information Form dated April 30, 2010.