Fibre network operator MetroFibre Networx has secured R2.5 billion in debt funding to expand its fibre rollout in South Africa.
This financing was arranged by banking and investment firm Investec, and will be used to extend MetroFibre’s fibre connectivity into underserviced homes and businesses.
MetroFibre’s financial director Wayne Edwards said South Africa had massive demand for fibre connectivity in many outlying regions.
“Filling that gap makes sense not only from a business perspective, but also from a socioeconomic upliftment standpoint,” Edwards said.
The funding agreement builds on an existing relationship between the two companies that dates back to 2016 when MetroFibre approached Investec for its first-ever round of debt financing.
Laverne Chetty of Investec Specialised Finance said that debt funding was usually only possible if a company had a long, established track record.
“But we saw MetroFibre’s potential very early on and subsequently provided specialised capex funding, structured to promote their growth over time,” Chetty said.
“That funding proved justified as MetroFibre’s s growth accelerated meaningfully during 2018 and 2019,” Chetty added.
300,000 more homes in 3 years
Edwards stated that alongside a recent R1.5 billion equity raise towards the end of 2020, the latest funding would enable MetroFibre to take fibre to more individuals and more businesses, giving them the opportunity to participate in the globally connected economy.
MetroFibre plans to densify its existing networks and reach an additional 300,000 residential homes across the country over the next three years.
“We believe the fibre market has reached a tipping point. People are spending more time in their houses which has drastically increased the demand for high-bandwidth internet services, both for the purposes of working from home, education and for entertainment. Fibre is going mainstream,” Edwards said.
Chetty reiterated that Investec’s support for MetroFibre’s growth was about more than just backing a business they believe in.
“Greater access to reliable telecommunications, of which fibre connectivity is playing an increasingly bigger role, has been shown to drive economic growth, increase access to education, and provide a myriad of social benefits,” Chetty said.