South Africa's Moya Networks has launched its ICO pre-sale to finance the purchase of capacity on the ACE Submarine Cable (ACE) as well as the West Africa Cable System (WACS). The aim, according to the company, is to bring high speed Internet to Afrika.
The Moya Networks token (MTK) pre-sale will kick-off on 11 October 2017 with purchases only being accepted in Bitcoin (BTC) or Ethereum (ETH). The company says it already has existing contracts with ACE and WACS and it is looking to raise BTC 6,000 (approximately $25,740,960.00 at the time of publishing on 3 October 2017).
Speaking to iAfrikan, Carrington Phillip, CEO at Moya Networks, explained that they chose the ICO route for raising funds, as opposed an IPO or any other traditional financing methods, because of timing, "An IPO takes too long and requires a lot of work. Given the timing as well we decided to go the ICO route,".
The full Moya Networks ICO launch will happen as follows:
- Start: 1 November 2017.
- End: 30 November 2017.
Phillip has experience in the telecommunications industry in Afrika having served as Managing Director for Smile Communications, in Kampala Uganda, from 2008 to 2010. Before that he was Vice President at Cox Communications in Atlanta Georgia.
ACE is expected to reach Southern Africa by 2018 and Moya hopes that by that time they would have raised enough funds, based on their contracts, to purchase capacity on the cable and distribute it o ISPs in Southern Africa. Apart from purchasing capacity, Moya Networks say part of the funds will also be used to buy "backup equipment from nearby vendors, to be installed in the Moya backhaul Network", while other funds are to be allocated to the team and administration.
Major uses of funds | Moya Networks ICO Whitepaper.
Interestingly, Moya Networks' Whitepaper states that only 20% of the profits accrued by the company from its operations will be distributed among token holders annually. Furthermore, the Moya Networks Token Crowdsale (MTK): Terms and Conditions also makes it clear that ownership of the token "carries no rights express or implied," and that MTK token holders "should have no expectation of influence over governance of Moya Networks,".
To the uninitiated it might sound strange that token holders, despite financing a portion of a company's operations, don't get to have a say on a company's governance nor the ability to vote, but holding a token is fundamentally different to being a shareholder. In most cases, ICO are akin to crowdfunding with some benefits afforded to those who buy tokens at different stages of the ICO. However, Phillip explained that there will be full disclosure of Moya Networks' audited financial statements to all MTK token holders.
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"Moya is passionate about providing affordable internet services to the next Billion - Africans in rural areas," said Phillip.
There are precautions that one has to take when trading in company tokens however. Among them are volatility of Bitcoin and Ethereum prices, given that the two are the only currencies Moya Networks will accept, as well as having an understanding of how cryptocurrencies work. Moya Networks acknowledge these risks in their Terms and Conditions document and also state that the MTK token will initially only be available via the Moya Networks website and after the ICO launch, token holders will be able to trade it on selected exchanges.
Whether the ICO route is the right one for raising funds for Moya Networks is likely debatable, but extra high speed Internet capacity is always welcome. Added to more capacity, competition in the space is also welcome as it also likely means that pricing will be competitive and the savings will probably be passed down to both business customers and consumers.Share this via: