Meet the ISPs Driving FTTH Deployment in South Africa

Earlier this month, South African ISP Vumatel introduced that its fiber-to-the-home (FTTH) infrastructure now passes two million houses. A million of those houses are in historically underserved areas, resembling townships.

This community footprint implies that Vumatel now presides over a extra substantial FTTH community than Telkom South Africa’s Openserve unit.

Fiber ISPs are very a lot on the rise in South Africa, with a number of gamers gaining traction with their regional rollouts.

Unusually, the vast majority of these operators use an open entry enterprise mannequin, permitting dozens of smaller corporations to market and resell fiber connectivity.

As we speak, we check out the primary gamers driving fiber development in South Africa.

Vumatel

URL: vumatel.co.za
Possession: MAZIV, itself owned by Remgro-owned Group Funding Ventures Holdings (CIVH)
Houses Handed: 2,000,000 (August 2023)
Houses Linked: 570,000 (December 2022)

Vumatel first launched FTTH expertise in Parkhurst, Johannesburg again in October 2014, changing into one of many nation’s fiber pioneers within the course of.

In October 2016, Vumatel acquired rival Fibrehoods, which began its personal fiber deployment in Gauteng in March 2015. In July 2017, the corporate snapped up fiber infrastructure belonging to Hyperlink Africa.

Vumatel is presently backed by MAZIV, which was created in 2022 by Remgro-owned Group Funding Ventures Holdings (CIVH) after it merged Vumatel and Darkish Fibre Africa (DFA) into a brand new infrastructure firm. Vumatel’s community consists of over 50,000 kilometers of fiber, whereas DFA’s spans 15,000 kilometers.

The ISP reached the two million houses handed milestone in August 2023, prompting Vumatel Chief Working Officer Dewald Booysen to remark: “Now we have rolled out protection in areas resembling Soweto, Khayelitsha and Umlazi. These are historically ignored communities. Vuma’s strategy can be community-orientated and allows us to work with the neighborhood to beat challenges which have historically hampered efforts.”

In August 2023, nonetheless, South Africa’s Competitors Fee beneficial the prohibition of the proposed merger between Vodacom South Africa and MAZIV.

In August 2023, South Africa’s Competitors Fee beneficial the prohibition of the proposed merger between Vodacom South Africa and MAZIV.

The competitors watchdog said: “The Fee is of the view that the proposed transaction is more likely to considerably stop or reduce competitors in a number of markets and that the circumstances provided don’t absolutely handle the resultant hurt to competitors.”

Openserve

URL: openserve.co.za
Possession: Telkom South Africa
Houses Handed: 1,107,794 (June 2023)
Houses Linked: 515,201 (June 2023)

Openserve is Telkom South Africa’s 100%-owned wholesale unit.

As of June 30, 2023, its fiber networks handed a complete of 1.108 million houses, up 24.4% year-on-year. Of this determine, greater than half 1,000,000 houses are related with fiber (515,201).

With its fiber footprint rising, Openserve ceased providing legacy DSL-based providers from October 1, 2021, forward of a deliberate copper shutdown in 2024.

Earlier this yr, Telkom revealed that it was contemplating promoting a minority stake in Openserve.

Within the telco’s buying and selling replace overlaying the three months ended December 31, 2022 (Q3 FY2023), Telkom famous: “Following the authorized separation of Openserve to a stand-alone entity, efficient 1 September 2022, numerous initiatives are underway with the objective of realising worth by the sale of a minority stake within the 100% owned Telkom subsidiary. Telkom has been receiving quite a few unsolicited approaches for this enterprise and is presently enterprise a market sounding train to check the breadth of curiosity for this deemed to be core enterprise of Telkom.”

MetroFibre Networx

URL: metrofibre.co.za
Possession: African Rainbow Capital (18.1%), STOA (23.08%), African Infrastructure Funding Managers (AIIM), South African Housing & Infrastructure Fund (SAHIF), and Sanlam Non-public Fairness
Houses Handed: 440,000 (March 2023)
Houses Linked: 126,000 (March 2023)

Established in 2010, MetroFibre Networx is an open entry fiber supplier based mostly in Gauteng.

In March 2016, African Rainbow Capital (ARC) secured an 18.1% minority stake within the firm for an undisclosed sum.  

In November 2020, non-public fairness fund African Infrastructure Funding Managers (AIIM) acquired a minority fairness stake within the enterprise.

Present shareholder STOA (23.08%)—a overseas funding car based mostly in France—supplied incremental funding as a part of the transaction, which was accompanied by new funding by the founders of the South African Housing & Infrastructure Fund (SAHIF), Rali Mampeule, and Kameel Keshav. Earlier backers Sanlam Non-public Fairness and ARC remained onboard as shareholders at that date.

On April 1, 2021, MetroFibre purchased LinkAfrica’s FTTH community in Gauteng and KwaZulu-Natal (KZN), including an extra 10,000 houses handed to its community. The transaction closed in June that yr.

In August 2022, Commonplace Financial institution Group efficiently finalized a ZAR5 billion debt finance package deal for MetroFibre to help its continued community rollout.

As of March 2023 (most up-to-date knowledge), its networks handed greater than 440,000 houses in 5 provinces. The ISP claimed 126,000 residential connections.

Going ahead, MetroFibre goals to densify its present networks to succeed in an extra 500,000 houses throughout the nation by 2025.

Frogfoot

URL: frogfoot.co.za
Possession: Vivica Group
Houses Handed: 350,000 (December 2022)
Houses Linked: 135,000 residential subscriptions and 13,000 companies 

Vivica first launched in 1998, beneath the DataPro Group model. In 2007, it rebranded as Vox Telecom.

Frogfoot itself was acquired by Vox Telecom again in 2015. In September 2021, Frogfoot acquired LinkAfrica’s Western Cape FTTH belongings to assist its presence within the Western Cape. 

Vox Holdings rebranded as Vivica Group in 2022, paving the way in which for the corporate to discover enterprise alternatives exterior of the telecom sector. Vox Telecom and Frogfoot are actually operated as subsidiaries of Vivica.

Presently, Frogfoot’s fiber community passes 350,000 houses, connecting 135,000 houses and 13,000 companies.

Octotel

URL: octotel.co.za
Possession: Actis
Houses Handed: 315,583 houses and companies (Might 2023)
Houses Linked: 100,815 (Might 2023)

Octotel payments itself as Cape City’s largest open entry fiber community, with infrastructure passing greater than 300,000 houses and companies, and connecting in extra of 100,000 prospects.

Launched in 2015, its community spans 16,000 kilometers throughout the Western Cape.

In December 2020, South Africa’s Competitors Tribunal permitted the ZAR2.3 billion ($150 million) majority takeover of Octotel by rising market funding agency Actis. The regulator connected no circumstances to the approval.

Actis first introduced the deal on October 12, 2020.

HeroTel

URL: herotel.com
Possession: Vumatel (45%), Medu Capital (15%), different unknown shareholders (40%)
Houses Handed: 272,197 (December 2022)
Houses Linked: 160,000 (be aware: determine contains mounted wi-fi subscriptions)

Based in 2014, Stellenbosch-based HeroTel is among the largest suppliers of mounted wi-fi entry (FWA) broadband providers in South Africa.

HeroTel is among the largest suppliers of FWA broadband providers in South Africa.

In recent times. the ISP has additionally thrown its weight behind FTTH expertise, with a view to rising its broadband enterprise.

In February 2017, black-owned non-public fairness firm Medu Capital acquired a 15% stake in HeroTel for ZAR74.25 million.

Extra just lately, in February 2022 Vumatel purchased a forty five% non-controlling stake in HeroTel; the promoting celebration was understood to be co-founder Alan Knott-Craig Jr.

URL: zoomfibre.co.za
Possession: Unknown
Houses Handed: 175,000
Houses Linked: 45,000

Zoom Fibre is an open entry fiber community operator that’s rolling out FTTH infrastructure in chosen suburbs throughout the nation.

The corporate was based by former Vumatel government Mohammed Manjra and presently has networks in Gauteng, Mpumalanga, KwaZulu Natal, Western Cape, and the North West province.

The corporate claims to be the quickest within the nation to cross 100,000 houses, having achieved that milestone in June 2022—simply two years after its launch.

At that juncture, Mr Manjra famous: “Rollouts are funded by a number of sequence of debt funding that now we have raised by native and worldwide funders over the previous 18 months.”

Zoom Fibre now has networks that cross 175,000 houses and claims 45,000 finish person connections.

Vodacom South Africa

URL: vodacom.co.za
Possession: Vodacom Group
Houses Handed: 165,000 (June 2023)
Houses Linked: N/A; Vodacom’s 171,747 connections determine contains houses related with platforms apart from FTTH (i.e. FWA)

Vodacom South Africa—the nation’s largest cell operator by subscriptions—entered the fiber sector in 2014, with an preliminary give attention to small and medium enterprises in Cape City, Durban, and Gauteng.

Now-defunct vendor Alcatel-Lucent was handed a GPON deployment contract in January 2015, with a view to the telco extending fiber protection to 250,000 houses and companies in Johannesburg, Pretoria, Cape City, and Durban by 2018.

Progress has been far slower than anticipated, nonetheless, and Vodacom’s fiber networks handed simply 165,000 houses and companies as of June 2023.

Whereas the telco doesn’t publish a determine for fiber connections, 171,747 houses and companies are related by its numerous mounted broadband platforms, together with FWA.

In November 2021, Vodacom entered into an settlement to amass a co-controlling curiosity in the entire materials belongings presently owned by Group Funding Ventures Holdings (CIVH), together with Vumatel and Darkish Fibre Africa (DFA).

Upon completion of the transaction, Vodacom will maintain a 30% fairness curiosity in a newly fashioned InfraCo that was subsequently named MAZIV. 

The plan got here unstuck in August 2023, nonetheless, when the Competitors Fee beneficial the prohibition of the proposed tie-up on anticompetitive grounds.