Vumatel and DFA now more valuable than Telkom

Community Investment Ventures Holdings (CIVH), which owns Vumatel and DFA, is valued at R23.2 billion — higher than Telkom’s market cap of R22.3 billion.

Remgro revealed this valuation in its recent announcement about a CIVH rights offer in which it raised R3.72 billion in equity.

CIVH will use the money it raised to repay all its debt which was incurred to acquire Vumatel.

“This injection will strengthen CIVH’s capital structure and enable it to retain the flexibility to capitalise on future opportunities,” Remgro said.

Remgro said it sees strong growth opportunities for Vumatel — which is expanding its fibre-to-the-home network — and DFA.

“Despite the difficulties of Covid-19, CIVH’s revenue grew by more than 25%, and it remained highly cash generative,” Remgro said.

CIVH invested over R3.5 billion during the prior financial year into expanding its operations and network.

Pieter Uys
Pieter Uys

This is only the beginning. Remgro’s Pieter Uys said following the rights issue, CIVH is well funded and positioned for its next phase of growth.

It is clear that Remgro is building a new telecommunications powerhouse through CIVH.

CIVH has evolved from a small dark fibre operator in 2009 with only Vodacom as a customer into a large telecommunications company delivering various products to a differentiated customer base.

Remgro has a strong foothold in the fibre market through its investments in Vumatel, DFA, and Seacom. It is now looking for opportunities in data centres and tower infrastructure for mobile networks.

It is even looking to roll out a wholesale mobile network, which may form part of the government’s planned national wireless open-access network (WOAN).

To align the company with its “Activate Africa” vision, CIVH is looking to change its name and unveil new branding.

CIVH versus Telkom

What stood out in the recent Remgro announcement was CIVH’s valuation of R23.2 billion.

This valuation is higher than Telkom’s market cap of R22.3 billion on Monday, 19 July 2021.

Telkom has a much larger fibre network, a far bigger customer base, and highly-priced property and telecoms assets.

The table below compares Telkom’s assets and valuation with that of CIVH.

Telkom versus CIVH
Division Telkom CIVH
Fibre network 165,900km 32,000km
Mobile sites 6,430 0
International network investment SAT-3/WASC None
Revenue R43.2 billion R4.6 billion (estimated)
Fixed service revenue
  • R15.1 billion
  • R4.6 billion
Mobile service revenue
  • R16.9 billion
  • R0
IT revenue
  • R6.0 billion
  • R0
Capex R8.4 billion R3.5 billion
Profit/loss R2.4 billion profit R1.1 billion loss
Valuation R22.3 billion R23.2 billion

Now read: New name for South African telecoms powerhouse

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Vumatel and DFA now more valuable than Telkom