South Africa’s secret fibre giant

Small town-focused Herotel has quietly grown into South Africa’s third-biggest fibre network operator (FNO).

The company recently told MyBroadband the number of homes it had passed with fibre-to-the-home (FTTH) connectivity reached over 562,000 by the end of September 2023.

By the same date, its next-nearest competitors MetroFibre and Frogfoot had passed 475,000 and 362,000 homes.

These two companies had been trading blows for the status of third-biggest FNO because Herotel’s reported numbers were believed to have included its wireless coverage.

The FNO has now clarified that this was not the case and that its homes passed figure only factored in FTTH customers.

Only the two heavyweights of Vumatel and Openserve had more homes passed with FTTH by September 2023.

Herotel CEO Van Zyl Botha attributed part of Herotel’s recent successes to backing by Vumatel parent CIVH, which acquired a 45% stake in the company in February 2022.

“Herotel has been extremely fortunate to have new shareholders and a board that has supported us every step of the way,” the company said.

“They have backed the management team’s strategy which has allowed our team to focus on execution.”

The table below shows how Herotel’s FTTH homes passed figure compares with the eight other major FNOs in South Africa.

Biggest FTTH networks in South Africa
Fibre network operator (FNO) Homes passed
Households that have access to a particular network
Homes connected
Households that use that network for connectivity
Last reported connectivity rate
Percentage of homes with access to particular network that use it
Vumatel 1,805,000 (December 2022)
1,982,000 (September 2023)
600,000 (December 2022)
664,000 (August 2023)*
33.2% (December 2022)
Openserve 1,158,761 (September 2023) 542,598 (September 2023) 46.8% (September 2023)
Herotel 562,556 (December 2023) 134,019 (December 2023) 23.8% (September 2023)
Metrofibre 500,000 (November 2023) 160,000 (November 2023) 32% (November 2023)
Frogfoot 361,000 (September 2023) 151,000 (September 2023) 41.8% (September 2023)
Octotel 350,000 (December 2023) 115,000 (December 2023) 32.9% (December 2023)
Vodacom 165,879, including businesses (September 2023) Unknown Unknown
Evotel 141,000 (March 2023) 39,000 (March 2023) 27.7% (March 2023)
Zoom Fibre 180,000 (May 2023)
191,000 (November 2023)
45,000 (May 2023)
47,750 (November 2023)*
25% (May 2023)
*Estimates for active customers on Vumatel and Zoom. Calculated using latest Home Passed figures, assuming Connectivity Rate remained unchanged

There are multiple reasons why Herotel has flown under the radar.

Firstly, its core customer base lies in secondary towns outside South Africa’s main metropolitan areas and cities.

The operator has over 200,000 customers in 400 towns, cities, and rural communities — including places as obscure as Tweebuffelsmeteenskootmorsdoodgeskietfontein.

It even operates local branches in small towns such as Ventersdorp.

The reason for its strong presence in less-populated areas is that Herotel’s origins are in the fixed-wireless access (FWA) Wi-Fi business.

The company was founded in 2013 through the consolidation of 30 smaller wireless Internet service providers (WISPs).

While it still offers wireless products, FTTH has become its major focus in recent years.

A Herotel bakkie near FWA tower somewhere in the rural parts of central South Africa

Contrary to the the view of many other FNOs, Herotel maintains that fibre rollouts in less populated areas were financially viable.

“Secondary towns offer untapped markets with underserved customers, compared to metros, where the cost of infrastructure development and marketing is higher,” Herotel said.

“By expanding into these areas, Herotel can leverage its local resources effectively, offering high-quality services at competitive prices while capturing emerging markets.”

Another part of its strategy that makes its rollouts more cost-effective is using aerial fibre rather than trenched fibre installations, which are more expensive, time-consuming, and carry a greater risk of unintended infrastructure damage.

Why Herotel is sticking to closed-access

Another factor contributing to its low-key status is that Herotel is a closed-access FNO.

That means it does not resell lines to third-party ISPs but deals directly with customers.

Consumers are often more aware of the name of their ISP and not the network on which their service operates.

Therefore, many customers might not know that Herotel also provides the infrastructure supporting their connection.

The company has argued in favour of a closed-access model because it believes it can provide better customer service and lower costs if it has control of the entire fibre ecosystem from end to end.

Because Herotel is both the ISP and the FNO, there are no additional barriers in the chain of communication and operations.

The company that operates the network is the same one that collects your monthly payments — there is no middleman.

If a customer complains about bad connection quality, there is no buck-passing between the ISP and FNO.

“By bypassing unnecessary and costly intermediaries, we maintain control over service quality and swiftly address customer needs,” Herotel told MyBroadband.

“It drives cost efficiencies and fosters direct engagement with customers.”

“Moreover, our extensive local presence, with offices and staff in over 55 locations nationwide, enables us to deliver personalised customer care and commercial support.”

“We drive out to the customer and solve the problem, no blame shifting between the FNO, the ISP or the local IT company.”

On the flip side, customers with Herotel don’t have the luxury of switching to another ISP if they are dissatisfied with the level of service.

However, Herotel achieved a respectable 69.88 in Analytico’s latest ISP satisfaction ratings, placing it fifth out of the 13 biggest ISPs.

In terms of its size as an ISP, Herotel ranks seventh, according to a report by Africa Analysis.

However, this is only when counting its fibre customers and excluding those on its wireless packages.

According to Herotel, some of the ISPs ranked higher in the report in terms of customer numbers because they included their customers on LTE, 5G, and wireless packages.

When including Herotel’s wireless customers, it jumps to the third spot overall, edging out Telkom and trailing behind Mweb in first and Vox in second place.

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South Africa’s secret fibre giant