XLink eyes M2M to grow its offering

Payment machine. (Duncan Alfreds, Fin24)
Payment machine. (Duncan Alfreds, Fin24)
Cape Town - XLink Communications - a provider of wireless data machine-to-machine (M2M) communication services - has firm plans to grow its services to the retail market on the back of growth of the M2M market valued at R1.5bn.

M2M allows a variety of devices and machines – including utility meters, vehicle sensors, point of sales terminals, security devices, consumer electronics and many more gadgets – to talk to each other.

XLink’s annuity based turnover is currently in excess of R150m and predominantly payment connectivity-related. It includes the Africa revenue for XLink, which amounts to about 10% of this value.

The company is tapping into M2M growth.

XLink CEO Anton Leal is optimistic about the growth of the business and said the company is eyeing to generate in excess of R200m in annuity-based revenue in South Africa this year and in 2015.

He added that XLink - which currently provides service in 10 African countries including Nigeria, Kenya and Ghana – is targeting an increase of its annuity-based revenue in Africa from the current 10% to 15% of annual turnover.

“We are very optimistic about M2M opportunities in Africa as technology can play a great role in improving both business and lives of communities in an underdeveloped environment,” said Leal.

XLink Communications was established in 2004, pioneering GPRS-based electronic funds transfer (EFT) data communication solutions in South Africa. It is currently the largest carrier of EFT services across the GSM network.

In 2007, Vodacom bought a 35% shareholding in XLink and later upped its stake to a 50.1% share to take opportunities in the M2M value chain.

Pan African Equity Fund 1 holds 25.1% of XLink and the remaining 24.8% is owned by XLink management.

Asked about the role of Vodacom and Pan African Equity Fund 1 in XLink, Leal said the company is very much a stand-alone business, run with strong entrepreneurial flair.

“Over the past 10 years we have proved our success by providing solid returns from a shareholder perspective and, at the same time, receiving recognition by the industry as a leader in the M2M sector,” said Leal.

To date, XLink manages M2M solutions for more than 68 000 businesses in Africa, facilitating 35 million M2M connections.

XLink says it can remotely provide, track, maintain and monitor more than 125 000 SIMS and 80 000 units in the field. It has also expanded its business to provide special M2M solutions for clients that include Spar, Mr Price, Montecasino, Wimpy and petrol stations.

The company’s business is concentrated in the retail industry.

Asked about plans to diversify the business away from the retail sector, Leal said: “There are plans in play to grow our business into other segments and also use commercial components and skills to provide new M2M services into the retail sector, such as refrigeration monitoring and cold chain management. ”

Smart metering solutions

As part of its revenue stream diversification, XLink is in partnership with WRP and KT Utility Forensics, which has developed smart metering solutions for the monitoring and management of both water and energy consumption.

The solutions comprise sophisticated M2M technology that effectively addresses the skills shortage barrier by providing clients with immediate access to daily monitoring and control of their water and energy consumption.

Smart water metering solutions allow for the identification of system malfunctions, leaks, pressure fluctuations or unauthorised water use as they happen and send early alarm notifications allowing for immediate action.

Furthermore, they remove the need for monthly manual meter readings and ensure that accurate readings are provided to local councils for billing.

“Without this form of ‘real-time’ monitoring a leakage of this kind is often overlooked and can run for months, if not years. As water becomes more expensive and scarce throughout South Africa, the need to implement continuous monitoring and evaluation will increase,” said Grant McGlashan of XLink.

XLink has successfully boarded the Device Insight platform – RMCS into the South African market. As the distributor and agent for southern Africa, XLink has ensured that the Vodafone platform is now available to the local market. XLink to date has added Digital Matter Embedded (DME), a leading OEM M2M provider, onto the platform. This has created an end-to-end managed M2M solution for the market ranging from temperature to asset tracking and fleet management.

Through these partnerships and diversification, the new revenue streams will ensure XLink gains a greater piece of the M2M revenue in the African market.

 - Fin24
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