SAfrica's Telkom plans Internet hub in London

JOHANNESBURG, July 22 (Reuters) - South African Internet Exchange (SAIX), a unit of Africa's biggest fixed-line operator Telkom (TKGJ.J), plans to set up an Internet hub in London to target northern African countries and boost its revenue.

SAIX is South Africa's largest internet access provider supplying customers with satellite internet connectivity and is a wholesale provider of Internet to Internet Service Providers (ISPs).

Telkom said in its 2008 annual report that it wanted to enhance growth of internet access services north of the equator. It said customers in the north of Africa normally purchased their internet services from European Internet firms at far cheaper rates than southern African internet operators, and that it wanted to tap into this market.

"The establishment of a central SAIX hub in London is expected to ensure that we can capture this market and increase our revenue," Telkom said.

SAIX customers include service providers, value-added network service (VANS) providers and incumbent operators in Mozambique, Namibia, Angola, Zimbabwe and Lesotho.

Richard Hurst, a telecoms analyst at global advisory firm IDC, said it makes sense for Telkom's SAIX to set up in London.

"If they can tap into the growing north African market it would be good for them," said Hurst.

Telkom said last month that it will in the next few years be aggressively funding the expansion of its African subsidiaries.

Telkom's annual results to end-March show data revenue rose 10.9 percent to 8.308 billion rand ($1.10 billion). The shares were 1.76 percent down at 138.50 rand by 1052 GMT, while the Top-40 index .JTOPI was up 0.52 percent. (Reporting by Gugulakhe Lourie; editing by Elaine Hardcastle)