Openserve beating Vumatel — and Frogfoot punching above its weight

The latest fibre operator perception survey shows that South African IT decision-makers trust Openserve the most, while Frogfoot is seen as offering great value for money.

The survey, conducted by Analytico at the beginning of May, attracted 2,095 responses from South African broadband users.

For this article, we focussed on responses from users who are knowledgeable about IT and telecommunications.

94% of these respondents advise their family and friends on which IT and telecommunications products and services to buy.

52% advise their company on which IT and telecommunications products and services it should invest in.

This means this audience is highly influential and gives a good idea about which companies are positioned for growth.

The survey results revealed that 41% of respondents associate Openserve with having the best fibre network, significantly higher than Vumatel’s 23%.

Openserve also topped the list regarding value for money, with 39% of respondents saying it is the premier operator when it comes to pricing.

Frogfoot punched above its weight in this area, with 14% of respondents associating it with offering the best value for money. It was only slightly behind Vumatel.

As Frogfoot is much smaller than Openserve and Vumatel, the results show that it has an effective marketing strategy to communicate its value to consumers.

The charts below show the results from the Analytico perception survey of South Africa’s top fibre network operators.

Vumatel struggling

Maziv, which owns Vumatel and DFA, has been struggling recently with network performance issues and perception problems.

It is unclear whether the problems are related to the looming Vodacom acquisition, which has been caught up in regulatory issues.

Vodacom and Remgro penned a deal where the mobile operator will acquire up to 40% of Maziv through a combination of assets of R4.2 billion and cash of at least R6.0 billion.

However, in August 2023, the Competition Commission recommended that the Competition Tribunal prohibit the proposed transaction.

Remgro and CIVH remain committed to the proposed transaction and will argue their case before the Competition Tribunal on 24 May 2024.

DFA and Vumatel were doing well when the deal was signed, with rapidly growing revenue and fast-improving earnings.

However, the situation has deteriorated significantly since then. The company’s mounting debt and higher interest payments are crushing it.

Remgro’s results for the six months to 31 December 2023 revealed that CIVH’s earnings plummeted by 97% compared to the same period the previous year.

The financial situation has reached such concerning levels that Vumatel was forced to significantly cut its capital expenditure and freeze debt.

The latest research from South Africa’s Internet industry association, ISPA, shows that problems at Vumatel and DFA stretch far beyond finances.

The most recent Fibre Network Operator (FNO) perception survey revealed that Vumatel and DFA have suffered a big decline in confidence.

The survey, conducted in February 2024, measured the views of Internet service providers (ISPs) of fibre network operators.

ISPA’s members were asked to rate the FNOs they do business with across eleven criteria on a scale of 0 to 10.

The results revealed that trust in DFA plummeted from 5.8 to 5.0, while Vumatel declined from 6.0 to 5.2.

More concerning is that DFA and Vumatel are now the worst-ranked fibre network operators in ISPA’s survey.

It shows that all is not well at Vumatel, as seen in the latest perception survey from Analytico.

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Openserve beating Vumatel — and Frogfoot punching above its weight