I am extremely impressed and encouraged to see Wananchi online's bid to takeover African Lakes and all their holdings which include all of Africa Online's branches as well as a number of infrastructure and internet licenses across the continent. Could this be the emergence of a truly African Mega-ISP?

Considering the attrition that the ISP industry is facing continent-wide, which was very aptly commented on by Russell Southwood in his article "The African ISP is dead - Long live the African ISP" where he spoke of the encroachment of the mobile operators into internet services and the threat that this posed to the ISP as we know it today. In this article he clearly indicated some of the survival strategies that ISPs would have to consider, including consolidation, divestiture into other revenue generating areas e.g. content production and regional expansion. It is interesting to note that Wananchi seem to have taken the prescription wholesale and are aiming to act on almost all of these areas.

For me on a personal basis I am very happy to see an indigenous African-led transaction of such magnitude in the ICT sector - which has in the past been dominated by "foreigners" who didn't really understand african markets. I can't wait to see what else Wananchi have up their sleeves!

Regards,

Brian

Begin forwarded message:

From: Joseph Mucheru <mucheru@wananchi.com>

Date: January 15, 2007 9:23:47 AM GMT+03:00

To: "brian@inhand.co.ke" <brian@inhand.co.ke>

Subject: FW: Press Announcement

From: Wananchi Online Ltd <announcements@wananchi.com>

Date: Mon, 15 Jan 2007 00:42:06 +0300

To: <All_Wananchi_Online_Ltd_Customers@wananchi.com>

Subject: Press Announcement

Wananchi Online creates a new Group Structure

On 28th December 2006, Wananchi Online together with a group of Kenyan,

British and American investors announced its intention to acquire the

entire issued and to be issued share capital of the African Lakes

Corporation (TALC). TALC is the holding company of Africa Online Limited

and UUNET Africa. The success of the acquisition will see the creation

of Africa's largest consumer broadband company and goes a long way in

achieving Wananchi's vision of being "Africa's leading Internet

Communications Provider". The bid is being made through a special

purpose vehicle registered for this purpose in the UK, The African

Telecoms Company Limited.

The full text of the announcement can be found at this url:

Short Url:

http://urlx.org/londonstockexchange.co.uk/fd1e5

Long URL:

http://www.londonstockexchange.co.uk/LSECWS/IFSPages/MarketNewsPopup.aspx?id

=1372930&source=RNS

The conclusion of the transaction will see the creation of a group

holding company of which I shall become Chairman and Joseph Mucheru

will become Deputy CEO. We will be joined on the board by amongst

others Mark Schneider, a seasoned American Media Entrepreneur who will

become Vice Chairman and Richard Bell, a seasoned East African ICT

Entrepreneur who will become Chief Executive Officer. Going forward

the company will implement a strategy to create the largest wireless

ADSL broadband network in Africa delivering consumer broadband services

to Wananchi across the continent.

As part of this process and in order to allow Joseph to focus on this

ambitious project, we are restructuring elements of the existing Wananchi

Online operations to align them with this strategy. To this end I am

pleased to announce that with immediate effect Sandeep Mangat will be

taking over the day to day operations of Wananchi Online and Hamish Govani

will be assisting him as Chief Financial Officer.

I am also pleased to inform you that Richard Bell has been appointed to

the board of Wananchi Online to assist in making sure that the companies

strategies are aligned with the bigger picture which I have already

outlined. Richard is a former director of TALC, founder of Swift Global

Kenya and Uganda, founder of Kenya Data Networks, founding Chairman of

TESPOK, KIXP and KENIC. He is currently the Managing Partner of East Africa

Capital Partners a private equity firm which specializes in Technology,

Media and Telecoms investments. He became a Sloan Fellow of the London

Business School in 2005.

We are please to tell you that limited broadband coverage is already

available in parts of Nairobi and Mombassa and we will be providing special

offers and a limited amount of free equipment to existing customers when

the full rollout begins. So I do encourage you to renew your dial-up and/or

email subscriptions now so that you can take advantage of these offers when

the time comes. Those whose subscriptions have lapsed or who fail to

become WOL customers in time will be time barred from these special customer

loyalty offers.

We will continue to keep you informed as our plans develop. For further

information you can contact Sandeep Mangat on 020 329 2000 or email

sunny.mangat@wananchi.com

-- 

James Gachui,

Chairman

Wananchi Online Limited