MetroFibre gets R5bn debt finance from Standard Bank

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 26 Jul 2022

Standard Bank Group says it has successfully finalised a R5 billion debt finance package for open access fibre provider MetroFibre Networx, to support its ambitious fibre-optic data network rollout across South Africa.

According to a statement, the financing will be used to expand MetroFibre’s fibre connectivity into homes and businesses in underserviced communities and contribute to increasing its reach by an additional 500 000 households across SA.

There is fierce competition in the local fibre market as local players set their sights on the township and smaller markets, popularly referred to as the underserved markets.

Last month, MetroFibre unveiled the MetroConnect offering, its pay-as-you-go fibre-to-the-home service (FTTH), to address connectivity shortfalls in these regions.

Brett Russell, head of product development at MetroFibre Networx, says connecting underserved areas is a “challenge that MetroFibre is tackling head-on”.

“The need for quality, affordable internet connectivity for work, education, transacting and entertainment purposes is ubiquitous, and has been rapidly escalated by the pandemic. We need to find ways to transcend the limitations that lock millions of South African homes out of access to fibre connectivity and leave them reliant on expensive and limited mobile connectivity,” he adds.

The fast-growing demand for fibre connectivity in many outlying regions presents opportunities for filling this critical gap, not only from a business perspective, but also from a socio-economic upliftment standpoint, says the fibre operator.

In April 2021, MetroFibre acquired the FTTH network and infrastructure of Link Africa in Gauteng and KwaZulu-Natal, after Investec injected R2.5 billion debt funding into MetroFibre, to help the open access fibre network operator strengthen its fibre network rollout.

“Partnerships such as these are a testament to how doing good in business is good for business, and in this case empowers South Africans through digital inclusion to foster meaningful social impact,” says Nishela Ramgoolam, executive: structured capital at Standard Bank Corporate and Investment Banking.

“Access to the internet is fundamental in closing the digital divide and giving individuals the opportunity to participate in the globally connected economy. This timely deal with a proudly South African digital infrastructure business supports our mission of driving positive, sustainable and truly embedded technological growth across the continent, and developing digital innovations that matter.”

Launched in 2010, MetroFibre is a significant player in the FTTH and fibre-to-the-business markets. The company says its open-access network currently passes over 350 000 homes in six provinces.

“Our next era of growth will be defined by bringing greater access to reliable telecommunications to the majority of citizens, with fibre connectivity playing an increasingly vital role in driving economic growth, increasing access to education and providing a myriad of social benefits,” adds Wayne Edwards, chief financial officer at MetroFibre Networx.