South Africa’s new fibre and telecoms giant

Remgro recently released its financial results for the six months ended 31 December 2019, which revealed that it is building a new telecommunications powerhouse in South Africa.

Remgro, through Community Investment Ventures Holdings (CIVH), owns two of the country’s biggest fibre players – DFA and Vumatel.

CIVH acquired 100% of Vumatel in May 2019. Vumatel is now working in tandem with DFA to provide fibre access to South African businesses and homes.

Their fibre rollout in recent years is impressive. CIVH’s (Vumatel and DFA’s) 29,300km fibre network scales across all key metros in South Africa.

It passes 690,000 premises and connects 11,500 mobile base stations and 240,000 homes and businesses.

This is, however, only the beginning. The company has sufficient funding to continue its aggressive fibre rollout across the country.

CIVH is also exploring further acquisitions in the South African fibre market to grow its scale and rapidly expand its footprint.

The image below provides an overview of CIVH’s history.

Good financial position

The company’s financials are equally impressive. Its customer churn is lower than 1% and there is strong growth because of increased bandwidth demand.

It has signed long-term contracts with numerous companies with an average remaining term of 6 years.

CIVH already has a dominant position in the residential fibre market through Vumatel and will now grow this market share through its fibre roll-out into areas with lower household income levels.

CIVH is also operating on healthy margins. It generated R1.745 billion in revenue for the six months to 30 September 2019 with an operating profit of R523 million.

Remgro’s financial report also shows that CIVH had an intrinsic value of R8.945 billion in December 2019 – up from R8.403 billion a year earlier.

Aggressive expansion plans

CIVH is already the big fibre-to-the-home and fibre-to-the-business player in South Africa and it is now looking to grow its portfolio.

The company is exploring opportunities in the Internet of Things (IoT), data centre, and tower infrastructure markets.

CIVH also wants to be a prominent player in the government’s Wireless Open Access Network (WOAN).

This will give it a footprint in the lucrative mobile data market and fit in perfectly with its open-access wholesale business model.

With former Vodacom CEO Pieter Uys as chairman and Vodacom’s Andries Delport as CTO, it is well-positioned to build and operate a mobile network.

The image below shows the opportunities which CIVH sees in the South African telecoms market.

Now read: WOAN – I am nearly a believer

Latest news

Partner Content

Show comments

Recommended

Share this article
South Africa’s new fibre and telecoms giant