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Staying confined to the inner city isn’t good enough for BE 100s maven Percy Sutton. Now the man is going global. The chairman emeritus of New York City-based Inner City Broadcasting has a brand new venture, African Continental Telecommunications Ltd. (ACTEL). Sutton, along with a hand-picked team of communication specialists, plans to lease and reposition a geo-stationary telecommunications satellite to 23,500 miles above southern Africa. When in place, the satellite will provide the region, which encompasses Zimbabwe, Angola, Zambia, Mozambique, South Africa, Botswana, Malawi, Swaziland and Lesotho, with mobile and fixed communications on 1,667 channels.
Under the arrangement, American Mobile Satellite Corp. (AMSC) will lease MSAT-2 and its ground station technology to ACTEL for a five-year renewable lease with payments of $38 million per year.
But that completes only the first phase. ACTEL has a $835 million plan to build a continent-wide, satellite-based wireless communications network enabling Africans to place or receive phone calls, pages, faxes or data from any location on earth.
By 2001, ACTEL plans to hire Hughes Satellite to build replacement satellites for the one it leases. The new space vehicle will have technology allowing more than 20,000 simultaneous transmissions to cover Africa. The prospect buoys Sutton, who estimates it would cost $32 billion to lay terrestrial phone lines to reach all major African towns and villages. “Without adequate communications, the African continent can’t be developed.”
When operational ACTEL’s services will operate through up-and down-link handsets, mobile units, private fixed-point telephone services and pay phones. The firm will get its profit from selling the transmissions either wholesale or retail to African companies and countries.
The venture began more than four years ago with Gregory Brown (a satellite specialist), Prentiss Yancy (an Atlanta attorney) and Charles Andrews, Sutton’s nephew and president of Inner City Broadcasting’s San Antonio operation. Brown knew the field and Andrews had the contacts. In the late 1980s, Brown co-founded a satellite firm in Hong Kong that ultimately became AsiaSat. In 1993, Andrews introduced Brown to executives at AT&T’s satellite division. They were impressed enough to invest $2 million and company resources over the next year and a half. At the time, Brown also met three AT&T officers who’d later join him as ACTEL’s senior staff. To get the project started, Yancy and Sutton gave Brown’s firm, African Telecommunications Ltd. (AfriCom) nearly $3 million in seed capital. Brown added several million dollars of his own money.
Then the unexpected occurred: AT&T sold its satellite division. Undeterred, Brown asked Sutton to become AfriCom’s chairman to give it visibility and credibility. Then, in a further show of faith, Pierre Sutton, Percy’s son and CEO of Inner City, invested $10 million of his firm’s money in the venture in November 1997.
But more had to be done. In 1997, AMSC arranged a meeting between Percy Sutton and Paul Dollery, the CEO of Elcore Holdings Ltd., a British firm and AfriCom’s main competitor. The outcome: AfriCom and Elcore merged to form ACTEL.
Michael W. Johnson, an African American who was AT&T’s chief financial officer, currently serves