CIVH merges Vumatel, DFA into one mega fibre company
Community Investment Ventures Holdings (CIVH), the Remgro and New GX-controlled parent company of fibre infrastructure operators Dark Fibre Africa (DFA) and Vumatel, today announced its two fibre network assets will be managed under a new infrastructure company.
This, as competition in the South African fibre market continues to heat up in what has now been termed the “fibre land grab”.
However, CIVH says the infrastructure entity’s name has not yet been announced.
In a statement, the company says this decision is a strategic step to meet ongoing customer and business requirements, and increase open-access offerings across the networks.
Although its two most significant operating subsidiaries (DFA and Vumatel) will be incorporated into this new infrastructure entity, CIVH says each business will initially continue to operate separately.
Dietlof Mare and Byron Billett, current executives of Vumatel, have been appointed chief executive officer and chief financial officer, respectively, of the new infrastructure company.
Vumatel pioneered fibre-to-the-home in SA and has since connected thousands of homes across Johannesburg, Cape Town and Durban to broadband internet. Vumatel has 1.5 million homes passed, with at least a future two million anticipated in emerging markets.
Andries Delport will continue as chief executive officer of DFA and will be an integral part of the infrastructure company management committee.
DFA is an open-access fibre infrastructure and connectivity provider in South Africa. It finances, builds, installs, manages and maintains a fibre network to transmit metro and long-haul telecommunications traffic.
It started rolling out its fibre network in 2007, and to date, DFA has deployed over 16 000km of ducting infrastructure in major metros, secondary cities and smaller towns.
Today’s announcement follows Vodacom Group in November acquiring a co-controlling equity stake in DFA and Vumatel, in a deal that is set to hasten the telco’s plans to dominate SA’s connectivity market.
At the time, Vodacom said it will hold a co-controlling 30% equity in the new infrastructure company, into which all of the assets owned by DFA and Vumatel will be transferred, in addition to certain Vodacom fibre assets.
Vodacom has an option to acquire an additional 10% stake in the new company to 40%.
However, the deal, which is still subject to regulatory approvals, has been met with resistance from local internet service providers that have since approached the Competition Commission about raising their anti-trust concerns.
“The fibre-to-the-home market is constantly evolving, especially in the open-access environment, and fibre network operators have to be able to evolve at the same pace,” says Raymond Ndlovu, chief executive officer of CIVH.
On his appointment as CEO of CIVH in 2019, Ndlovu told ITWeb that one of his biggest objectives was to exploit the DFA and Vumatel fibre assets, as the firm looks to solidify its position in SA’s telecoms space.
“By establishing our new infrastructure company, we can place both DFA and Vumatel in a position to meet this developing demand for fibre connectivity and continue providing innovative products and solutions to the market. The establishment of this holding company will enable both Vumatel and DFA to expand their open-access network infrastructures to meet customer requirements, with the ultimate goal of connecting more of South Africa to high-capacity fixed-line infrastructure,” Ndlovu says.
“We realise that to continue connecting as many South Africans as possible, we need to ensure our businesses run effectively. This new infrastructure company will allow us to continue bridging the digital divide by enabling DFA and Vumatel to operate their infrastructure assets seamlessly and on an open-access basis, under one aligned strategy,” says Mare.