Vumatel slashes rollouts as profits plunge

Jan

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Competition Commission blocks rollout of affordable fibre to poor communities

The Competition Commission’s decision to block Vumatel and DFA parent company CIVH from selling a 30% stake to Vodacom has come back to haunt South Africa’s poorest households.

Remgro, which owns 57.03% of Community Investment Ventures Holdings Limited (CIVH), reported on Tuesday that the company’s earnings nosedived 96.7% — from R184 million to R6 million.
 
loaded headline....

Furthermore, whether 5G and fibre should be considered direct competitors is debatable.
Click to expand...

it is. what is not debatable is that fixed wireless is a direct competitor (and this is mainly what the 5G spectrum is being used for)
 
Sensational headline. We are anything but a R30k+ area yet Vuma didn't do their homework before the time and now refuses to move us to Vuma Reach. What isn't mentioned is how they are trying to get people to signup nonetheless and the stalling in Core rollouts are simply because people refuse to pay their ridiculous prices so they are installing Reach in those areas that would otherwise get Core. Key only exists because of cross subsidisation.

Simply put Vuma is too convoluted, too expensive and too expensively run. Change your business model and DROP your prices or soon everyone else will overtake you.
 
Bullshit argument. "but the poor people" is standard defensive PR language.

If Vodacom merges with CIVH, we are basically creating a new Telkom along with all the problems we had when they had a monopoly.
 
they will just raise prices...although a 95% drop in earnings sounds like a ****up somewhere...lack of planning...

lets pay more to get those profits rolling again...the south African way
 
We have plenty of fibre providers. A little consolidation isn't going to hurt, and with the ANC ****ing up the economy so badly, it is necessary for businesses to survive.

I can't believe we have a Communist Commission with absolute power to tell private business what they are allowed to do.
 
Gaz{M} said:
We have plenty of fibre providers. A little consolidation isn't going to hurt, and with the ANC ****ing up the economy so badly, it is necessary for businesses to survive.

I can't believe we have a Communist Commission with absolute power to tell private business what they are allowed to do.
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The problem is the limited back-hual providers

DFA and Vodacom have a significant market share combined.

Lack of back-haul options are a major limited to FTTH roll-out and competition.
 
Cross-posting this from the front page for your eviscerating pleasure.

Openserve's strategy has not served it well either. Go look at Telkom's numbers in detail. It is also struggling and offloading its tower business to inject cash into the business.

I respectfully disagree that this transaction needs to be blocked as a matter of principle.

I know this is an unpopular opinion, but just because Vodacom and Vumatel are big companies doesn't make them the enemy.

Just because they've behaved badly in the past, doesn't mean this deal is a bad idea. (Also: Remember Hanlon's Razor. Not all bad behaviour is malicious. Much of it is incompetence.)

For my part, we've taken Vodacom and Vumatel on when they've stuffed consumers around (e.g. disappearing data, price hikes), and we'll continue to do that if the transaction goes through. They won't suddenly become untouchable.

I also disagree with it being viewed as a merger. It's fine that it's classified as a merger because of the technicalities, but at the end of the day this is really just Vodacom buying a 30% stake in CIVH.

To explain further: Maziv will not be Vodacom + Vumatel if the deal goes through. Vodacom's cellular network is not part of this. Maziv will be Vumatel with some of Vodacom's fibre assets — that's an important distinction.

You're also wrong that no-one in the telecoms industry agrees with the deal. Those in favour just want assurances there won't be abuses. For that reason there was a massive set of conditions negotiated with the CompCom and they just tossed it.

Lastly, if our competition authorities insist on blocking local deals like this (name a local entity that would be interested in Vumatel that has this amount of cash to spend?), then all our local companies are going to become increasingly foreign-owned.

(It isn't lost on me that Vodacom is majority Vodafone-owned, but what sets Vodacom apart from other similar foreign direct investment is that they've been operating in the country since 1993. Also: Would we rather have Vodacom's profits get invested in companies like Vumatel, or have them kicked up to Vodafone?)

At the end of the day, this comes down to a choice of whether we want to see the rapid expansion of FTTH to poorer households in South Africa or not.

(Also, open invitation: If someone else is willing to step up to offer a R6bn+ cash injection to any of South Africa's fibre network operators for low-income area rollouts, feel free to contact me. Just in case there's an alternative I've missed.)
 
juanthyme said:
loaded headline....



it is. what is not debatable is that fixed wireless is a direct competitor (and this is mainly what the 5G spectrum is being used for)
Click to expand...
That's not necessarily true, 5G technology isn't meant for unlimited fixed line broadband, it's still a mobile network technology and as such contention on those networks will inevitably lead to congestion. The reasons it's being used mainly for fixed broadband is because the coverage is extremely limited. And that's the fault of the network providers and their lack of investment into base station upgrades. Granted their reasons for slow rollout is sound, given SA's challenges. That still doesn't change facts.

Fibre broadband is a different product. It is meant to be symmetrical (FNO's are to blame for it not being so) and completely data cap free. No mobile network can possibly compete in that regard.
 
Jan said:
Cross-posting this from the front page for your eviscerating pleasure.

Openserve's strategy has not served it well either. Go look at Telkom's numbers in detail. It is also struggling and offloading its tower business to inject cash into the business.

I respectfully disagree that this transaction needs to be blocked as a matter of principle.

I know this is an unpopular opinion, but just because Vodacom and Vumatel are big companies doesn't make them the enemy.

Just because they've behaved badly in the past, doesn't mean this deal is a bad idea. (Also: Remember Hanlon's Razor. Not all bad behaviour is malicious. Much of it is incompetence.)

For my part, we've taken Vodacom and Vumatel on when they've stuffed consumers around (e.g. disappearing data, price hikes), and we'll continue to do that if the transaction goes through. They won't suddenly become untouchable.

I also disagree with it being viewed as a merger. It's fine that it's classified as a merger because of the technicalities, but at the end of the day this is really just Vodacom buying a 30% stake in CIVH.

To explain further: Maziv will not be Vodacom + Vumatel if the deal goes through. Vodacom's cellular network is not part of this. Maziv will be Vumatel with some of Vodacom's fibre assets — that's an important distinction.

You're also wrong that no-one in the telecoms industry agrees with the deal. Those in favour just want assurances there won't be abuses. For that reason there was a massive set of conditions negotiated with the CompCom and they just tossed it.

Lastly, if our competition authorities insist on blocking local deals like this (name a local entity that would be interested in Vumatel that has this amount of cash to spend?), then all our local companies are going to become increasingly foreign-owned.

(It isn't lost on me that Vodacom is majority Vodafone-owned, but what sets Vodacom apart from other similar foreign direct investment is that they've been operating in the country since 1993. Also: Would we rather have Vodacom's profits get invested in companies like Vumatel, or have them kicked up to Vodafone?)

At the end of the day, this comes down to a choice of whether we want to see the rapid expansion of FTTH to poorer households in South Africa or not.

(Also, open invitation: If someone else is willing to step up to offer a R6bn+ cash injection to any of South Africa's fibre network operators for low-income area rollouts, feel free to contact me. Just in case there's an alternative I've missed.)
Click to expand...
Correct. No ISP wants Vodacom to get a better price on a link that they would themselves receive.
 
This is very click bait, MetroFiber has/is done/doing low cost roll out without a problem.
very well one might add as well.
Vuma keeps saying we just need this then this then this and then the Key projects will be rolled out, its a moving goal post, they like the networks and data prices, there is always some they need, and once they get one thing they need another thing to make it work.
This feels very media war style.
 
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DStvNothingOn said:
This is very click bait, MetroFiber has/is done/doing low cost roll out without a problem.
very well one might add as well.
Click to expand...
In Townships with household incomes below R5,000 per month? If so, can you link to these projects?
 
rpm said:
In Townships with household incomes below R5,000 per month? If so, can you link to these projects?
Click to expand...
I'm going to quote MyBB on this one
- https://mybroadband.co.za/news/fibre/518115-metrofibre-launches-first-store-in-township.html
- https://www.itweb.co.za/article/metrofibre-joins-pay-as-you-go-fibre-race/nWJadMbNaBLMbjO1

Tembisa info - The Tembisa area struggles with affordability: average monthly household income is about R5 000

- https://housingfinanceafrica.org/app/uploads/CAHF-CitymarkTembisa-Flyer.pdf


I would like to add I feel the metro project is better as it allows higher speeds unlike reach, Ive seen some complaints on the reach threads about restricted from higher speeds.
- https://www.itnewsafrica.com/2023/1...its-first-fibre-experience-store-in-thembisa/
 
DStvNothingOn said:
This is very click bait, MetroFiber has/is done/doing low cost roll out without a problem.
Click to expand...
Can you really say for certain they are doing it without a problem?

Old Mutual gives no insight into Metrofibre's financials, as far as I know.

All we know is there have been 3–4 fundraising rounds, with debt refinancing along the way (see: here).

Some relevant quotes suggesting that they've also hit their debt cap:

"...we've gone through a massive phase of growth in terms of deploying network and deploying infrastructure right across the country and we now need to — let's call it reorientate our business — around monetization of that network..."

"That's where the rebrand, the product position — the new products that we've launched where that positioning comes from."

"So we need to make a shift as a business in that direction. But we're continuing to build out. This year we've gotten the budget around 100,000 homes we want to build and we want to continue on that sort of cadence into the foreseeable future."

Thembisa is also not Alex.

No disrespect to the Metrofibre guys. They are doing phenomenal work. I'm a customer (albeit only for a few months now) and have not had any issues. Great service so far, solid network experience. Only outages are usually in the early morning hours, which is a reasonable time to do maintenance on a residential network.

DStvNothingOn said:
This feels very media war style.
Click to expand...
Sometimes even neutral media have to call a spade a shovel.

That said, I am willing to publish well-reasoned arguments that differ from my own.
 
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