Two big winners in South Africa’s ISP market

Afrihost and Webafrica are emerging as the two biggest winners in South Africa’s Internet service provider (ISP) market.

The local ISP market is highly competitive, with numerous large and small service providers fighting for market share.

The industry is associated with small margins and difficult trading conditions, which benefit larger ISPs because of negotiation power and economies of scale.

Therefore, it is unsurprising that there is a lot of consolidation in the market as ISPs try to gain an advantage.

Afrihost has done an exceptional job buying quality companies to create an Internet service provider powerhouse.

In 2011, Afrihost acquired a controlling stake in Axxess — a leading service provider that was named ISP of the Year by MyBroadband.

Afrihost gave the Axxess management team, which maintained a minority shareholding, the freedom to continue doing what made them successful. This worked exceptionally well.

Axxess continued its great work, won the coveted ISP of the Year award for a third time in 2015, and continued its strong growth.

Afrihost replicated its success with Axxess with two other acquisitions — Cool Ideas and Home Connect.

These two fibre ISPs have been showing strong growth over the past few years, making them logical additions to the Afrihost stable.

Afrihost now owns four of the strongest brands in the South African ISP market, with a growing number of subscribers.

Webafrica CEO Sean Nourse

Not to be outdone, Webafrica acquired Mweb from Dimension Data in 2023, creating the largest independent service provider with over 500,000 subscribers.

This is an interesting turn of events, as Webafrica itself was for sale in 2019. However, after it was unable to fetch its asking price of R300 million, it was taken off the market.

Former Webafrica CEO Tim Wyatt-Gunning told MyBroadband at the time that the ISP had not been sold and that “the owners of Webafrica remain the same in all aspects”.

Webafrica shifted its focus back to rapid growth, which included growing its fibre and LTE subscriber base.

Webafrica CEO Sean Nourse said they strongly focus on growth and connecting as many homes as possible to the Internet.

The Mweb acquisition helped with this growth by adding a large number of customers quickly, giving it additional scale.

“Mweb is the largest fibre-to-the-home Internet service provider (ISP) in the market, and it accelerates our growth,” Nourse said.

“It gives us the growth to continue to be successful and the scale and synergies to reinvest into the business.”

He said Webafrica and Mweb services over 500,000 combined customers. “We have ambitions to double that,” he said.

“Through Mweb and Webafrica, we will be able to reach the 1 million connected customer mark — possibly in the next three years.”

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Two big winners in South Africa’s ISP market