Vodacom said to be eyeing Vumatel stake

Speculation is growing that Vodacom is poised to buy 49% of fibre-to-the-home provider Vumatel. Industry talk is that Dark Fibre Africa, in a deal possibly facilitated through its largest shareholder, Remgro, will acquire the remaining 51% of the company started by Niel Schoeman and Johan Pretorius.

None of the parties is commenting, but news a week ago that former Vodafone executive Dietlof Mare has taken the reins at Vumatel has added further fuel to the fire.

Vodacom CEO Shameel Joosub on Tuesday declined to comment on the speculation, while Schoeman — who has been appointed as Vumatel’s executive chairman with immediate effect — also declined to comment. Market talk about a possible acquisition of a stake in Vumatel by Vodacom first came to TechCentral’s attention several weeks ago and it not clear whether discussions are still taking place.

Bloomberg reported in March that Johann Rupert’s investment vehicle, Remgro, is in “advanced talks” to buy the fibre up-start. The plan, according to the news wire’s unnamed sources, is to combine Vumatel and DFA, with Remgro owning a majority stake.

DFA was founded in 2007 and has deployed more than 10 000km of fibre-optic cable infrastructure across South Africa.

If the deal happens, it will be a spectacular exit for Vumatel, which entered the fibre market in 2015 with a project to wire up the Johannesburg suburb of Parkhurst to high-speed Internet. Vumatel has since expanded significantly across suburbs in Johannesburg, Cape Town and Durban. It recently revealed plans to begin deploying fibre broadband to townships, too, with a project to wire up Alexandra, north of Johannesburg, expected to begin soon.

In an podcast interview with TechCentral last Monday, Vodacom Group CEO Shameel Joosub said the company plans to ramp up its investment in fixed-line infrastructure, including fibre-to-the-home broadband.

“There is an over-dependence on mobile. We need more fixed in the country,” he said. “We need to up our level of investment into fixed, either in the form of joint ventures, or in the form of straight-out investment, and what you will see from us is we will start to play a bigger role in the fixed space,” Joosub said.

‘Meaningful player’

Telkom’s Openserve and Vumatel have taken an early lead in the fibre-to-the-home market in South Africa.

“I don’t know if we want to be the biggest player, but we want to be a meaningful player in fibre to the home and increase the level of capital investment…,” Joosub said in the interview.

In its 2017 annual report, Vodacom said its fibre roll-out had been slower than anticipated. “The roll-out of fibre is an important part of realising the full potential in moving to a digital-based economy, including especially in becoming the preferred provider of communication and lifestyle services for families. Unfortunately, our progress in rolling out fibre continues to be slower than anticipated as we develop the systems and skills needed to deal with a very different business model to our traditional mobile-based offerings.”  — © 2018 NewsCentral Media