Remgro sees big 5G opportunity in Vumacam poles

The thousands of security camera poles deployed across Johannesburg and parts of Pretoria by Vumacam provide an ideal opportunity to deploy next-generation 5G broadband to South African consumers.

This was one of the highlights of a presentation on Tuesday by Pieter Uys, chairman of Remgro-controlled fibre telecommunications holding company CIVH, which owns Vumatel and Dark Fibre Africa through a newly established entity provisionally called FibreCo.

FibreCo owns 51% of Vumacam, whose camera poles are connected through Vumatel’s fibre ducts.

“Vumacam’s infrastructure could be developed into tower opportunities,” Uys said, adding that growing demand from mobile operators, which is expected to surge in the coming years as 5G is rolled out, could drive this opportunity.

About 3 000 of Vumacam’s camera poles are suitable to be converted into mobile base stations, Uys added. These have power and fibre and a box to store radio equipment and “can be monetised at some point”, he said.

Uys was speaking at a Remgro Capital Markets Day in Cape Town at which various CIVH executives spoke about the group’s telecoms strategy.

DFA CEO Andries Delport told investors at the same event that so-called “small cells” – smaller base stations that cover a smaller area than traditional mobile towers – are a big opportunity.

Doubling

Conservatively, he said, the number of base stations in South Africa will double in the next decade as 5G networks are built. The new sites will mostly be smaller and be built to take advantage of higher frequencies, which aren’t able to propagate signals over long distances. South Africa is expected in the next couple of years to make so-called millimetre-wave spectrum available for 5G services, and these frequencies, by their nature, will require a densification of networks using small-cell sites.

At the same time, Remgro disclosed to investors that CIVH has plans to expand its fibre offerings elsewhere in Africa, where it believes there is significant untapped demand. This initiative will be headed by Delport.

Uys said, however, that the South African market is still a huge opportunity, with the group planning to drive down prices in future years to the point where it can monetise uncapped fibre delivered into townships like Alexandra in Johannesburg at an average price to end users of less than R100/month.

The group also sees opportunities in building data centres, particularly at the “edge”, closer to consumers and businesses.

Meanwhile, it has put its participation in the wholesale open-access network, or Woan, on hold after government paused the licensing of the entity earlier this year.

The group’s expansion plans come as Vodacom seeks to buy a substantial but non-controlling stake in the newly created FibreCo holding company, with plans to invest at least R6-billion. If the deal passes muster at the Competition Commission, which Uys said he is confident it will, Vodacom will acquire between 30% and 40% of the business, with CIVH holding the rest.

Remgro owns 57% of CIVH, with Khudu Pitje’s New GX Capital owning 37.5%.  – © 2022 NewsCentral Media