IDC Signs Agreement with Wananchi for DTH in Africa

Wednesday, June 30th, 2010
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OTTAWA, ONTARIO — 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.