HeroTel splashes R600m on acquisitions, eyes more
HeroTel has to date spent around R600 million acquiring over 40 owner-operated businesses, as part of its vision to bring affordable, Internet services to homes and businesses across SA.
Over the past five years, the local telco has been on an acquisition trail, buying businesses specialising in software platforms, Internet services, voice over Internet Protocol services, fibre and wireless services as part of its expansion strategy.
Founded in 2014 with the goal of providing fibre and wireless broadband services, the last mile telco, whosegroup chairman is Alan Knott-Craig Jnr, currently services around 83 000 homes and business in over 400 towns in SA.
Speaking to ITWeb, Van Zyl Botha, CEO and founding member of HeroTel, said the company recently consolidated its fibre assets and wireless Internet service provider (WISP) brands under the HeroTel brand name, as part of its ambition to strengthen its nationwide strategy.
“Over the last five years, HeroTel has been quietly acquiring over 40 businesses, which until now remained trading under their original brands. We are currently re-launching and re-branding these companies under a single brand and we are rolling out a national strategy with the purpose of connecting everyone in SA.
“Our plan has always been to unite these companies into a single national entity, which can then use its scale to bring about meaningful change to an industry that desperately needs a shake-up.”
The HeroTel Alliance now has expanded coverage via its WISPs in the North West, Gauteng, Limpopo, Mpumalanga, Western Cape, KwaZulu-Natal, Eastern Cape and surrounds, making it SA's largest wireless Internet service provider.
Previously acquired businesses include: Airband Connect, BreedeNet, Border Internet, Bronberg Connect and HX Systems, among others, as the company eyes an additional 20 acquisitions this year.
The telco believes it is uniquely positioned to correct SA’s existing connectivity imbalance in pursuit of its aim to connect every citizen in SA.
Having seen the profound impact Internet access can have on an economy, Botha believes enabling connection across the country enriches the lives of ordinary South Africans, while stimulating GDP growth, by driving skills development and creating job opportunities.
“While the fragmented local Internet market has served a vital role in connecting under-serviced regions of SA, the whole is greater than the sum of its parts. By consolidating the market, HeroTel is unlocking this collective value; amassing the scale and capabilities necessary to address the ongoing industry issues that prevent the national availability of Internet.”
With already existing towers, fibre infrastructure and networks throughout SA, it makes sense not to build additional networks on top of existing ones, but to rather utilise the resources and services of partners that are already established in those specific areas, notes Botha.
“Our strength is in our footprint and goes as far as we can to connect as many locals as possible. So our strategy is to consolidate the industry and not to build over the existing infrastructure.
“Our current scale will allow us to play a meaningful role in correcting the connectivity imbalances that currently exist in SA, especially in remote areas. As we grow, we are open to further acquisitions that bring new geographic areas or fresh skills into the group.”