Vodacom’s big reputational problem with fibre

New research by Analytico revealed that Vodacom’s fibre services are suffering from a poor reputation, lagging far behind competitors like Openserve and Vumatel.

Vodacom started rolling out fibre-to-the-business and fibre-to-the-home networks in business parks and gated communities a decade ago.

It said it was planning to connect thousands of homes and businesses to fibre-based broadband access over two years.

Vodacom CEO Shameel Joosub said in 2014 that Vodacom was increasing its investment in fibre-to-the-home and fibre-to-the-business.

“We have to invest more heavily into fibre to carry the traffic and provide customers with the requisite speeds,” said Joosub.

He added that they saw fibre-to-the-home and fibre-to-the-business as a key strategy for Vodacom to grow revenue.

Fast-forward a decade, and Vodacom failed to realise its dream of capturing a large share of the South African fibre market.

Despite having much deeper pockets than Openserve and Vumatel, it could not compete against them.

Instead, Vodacom penned a deal with Remgro to acquire up to 40% of Maziv, which owns Vumatel and DFA.

Vodacom plans to buy a stake in Maziv through a combination of fibre assets worth R4.2 billion and at least R6 billion in cash.

However, it hit a snag. In August 2023, the Competition Commission recommended that the Competition Tribunal prohibit the proposed transaction.

Remgro and CIVH remain committed to the transaction and are currently engaged in hearings at the Competition Tribunal defending the deal.

Vodacom’s reputational problem

A recent survey from Analytico revealed that South African businesses and consumers do not trust Vodacom’s fibre network or pricing.

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.

The survey revealed that 41% of users think Openserve has the best fibre network, followed by Vumatel at 23% and Metrofibre at 10%.

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

Only 8% of respondents thought Vodacom has the best fibre network, and only 4% associate the company with the best prices.

Vodacom has the worst reputation regarding fibre prices and was also well behind the leaders in network quality.

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