The fibre Internet industry in South Africa is poised for significant developments, particularly with Vodacom’s planned acquisition of a 30% stake in Vumatel and its parent company, Maziv.
Initially, the Competition Tribunal blocked the acquisition, but after negotiations with the Competition Commission, the matter is now set to be reviewed by the Competition Appeals Court without opposition. Both Vodacom and Maziv are now eagerly awaiting the court’s decision to allow the transaction to proceed.
The Internet Service Providers’ Association (ISPA) expressed optimism to MyBroadband about the prospects of the deal passing, citing it as a likely catalyst for further consolidation in the sector. This could pave the way for a future merger between MTN and Telkom, which were discussed for a buyout in 2022. Telkom, which operates fibre network provider Openserve—a key competitor to Vumatel—has kept avenues for negotiation open despite previous talks collapsing.
Ispa believes the terms set for the Maziv deal could serve as a framework for similar future transactions involving MTN and Telkom.
Other fibre network operators have also weighed in on the situation. Dr. Christian Wirtz, Chief Commercial Officer of MetroFibre, noted that successful mergers and acquisitions in the fibre sector could encourage further investments. He emphasised the positive effects this could have on digital inclusion and extending fibre connectivity to underprivileged areas.
Wirtz remarked that consolidation is a natural progression for fibre network operators and Internet service providers as the market matures. MetroFibre itself is seeking to expand its network by acquiring complementary businesses. He expressed confidence that the Vodacom-Maziv deal wouldn’t hinder their plans, as MetroFibre’s strategy does not rely on overbuilding in the same areas.
However, he cautioned that the true effectiveness of the conditions stipulated by the Competition Commission would only emerge over time. Wirtz stated, “The real test lies in whether the conditions are met, adhered to, and monitored down the line.”
MetroFibre, which has been cautious with new fibre rollouts in recent years, focuses on increasing its active customer base within existing areas rather than expanding aggressively. Recent statistics reveal that 34% of homes with access to MetroFibre’s FTTH network are active, compared to the connectivity ratios of Vumatel and Openserve, which count any home with a line drop as “connected.”
Wirtz acknowledged the potential for new fibre infrastructure in underserved regions but did not endorse a competitive “land grab” approach. “We consider it economically inefficient to duplicate infrastructure in the same geographic area. Our goal is to maximise the utilisation of our existing network,” he noted.
He added that future rollouts would be financed through equity, debt, and internally generated cash flow, ensuring sound capital allocation.
Wirtz challenged mobile network operators to craft strategies that offer compelling services in a converged landscape, where fibre connectivity stands out as the most reliable Internet access option.
“The demand for data, speed, and Internet of Things services will continue to drive exponential growth in fibre connectivity and penetration rates,” Wirtz predicted. “We will keep developing solutions tailored to the evolving needs of our customers, particularly in underserved communities lacking fibre access near our network.”
