Fibre war in South African township

A fibre industry boardroom brawl brought to light by a tell-all book has spilled into the streets of Kayamandi in Stellenbosch.

Vumatel officially launched its R99 per month Vuma Key uncapped fibre service on Tuesday, announcing Kayamandi and Alexandra as the first townships to receive the product.

This comes after Vumatel piloted the concept in Alexandra over roughly 18 months.

Selecting Kayamandi as the second Vuma Key township would seem arbitrary had it not been for recent revelations following the publication of a book — Life Lessons: How to Fail and Win, by Alan Knott-Craig Jr.

In it, Knott-Craig told the story of corporate rough and tumble between him, Herotel, and Vumatel’s parent company, CIVH (now Maziv).

Knott-Craig’s telling features serious allegations, including that CIVH orchestrated a hostile takeover of Herotel and that Herotel tried to kill his non-profit free Wi-Fi company Project Isizwe.

However, the Herotel board and CIVH have denied the allegations, disputing just about every detail in Knott-Craig’s version of the story.

Now Vumatel has blanketed Kayamandi in Vuma Key fibre, competing directly against Knott-Craig’s latest venture, Fibertime, which launched in the township in November 2022.

Vuma Key offers 10Mbps uncapped fibre at R99 per month, while Fibertime offers similar speeds at R5 per day.

Given that Vumatel is a Johannesburg-based company with many townships that Vuma Key could have rolled out to next, the decision to build inside Fibertime’s launch area was no accident.

It is also interesting that Project Isizwe announced the launch of free Wi-Fi in Alexandra today.

The project was launched in partnership with Friends of Alexandra, which runs on fibre provided by‬ Vumatel and Internet connectivity from Webafrica.

The bad blood between Knott-Craig and CIVH seems to trace back to a 2021 deal where it acquired a significant stake in rural broadband player Herotel.

Knott-Craig co-founded Herotel in 2014 and served as its executive chairman until March 2021, when the company’s board dismissed him.

He wrote that he decided to resign as the relationship with the Herotel chief executive broke down.

However, the Herotel board told MyBroadband that he was fired for serious corporate governance breaches following a forensic report.

Around the same time, Herotel announced an aggressive fibre rollout to underserviced communities throughout South Africa.

Knott-Craig remained a significant shareholder in the business, and he alleged in his book that Herotel’s CEO was strategising to push him out through a CIVH buyout.

However, CIVH and Herotel said this was simply not true and that Knott-Craig had approached former CIVH CFO Kobus Viljoen about a deal almost a year prior — on 2 June 2020.

Nearly all shareholders, including Knott-Craig, voted in favour of the deal and considered it a good outcome.

“The board, with their advisors, managed the transaction, not management, and eventually approved and recommended the transaction to shareholders,” Herotel said.

By definition, this means the deal was not a hostile takeover.

A hostile takeover is an acquisition in which one company takes control of another without the approval or consent of the target company’s board.

CIVH told MyBroadband that successful transactions were concluded with various Herotel shareholders, including Knott-Craig.

These transactions resulted in CIVH holding a non-controlling minority interest in Herotel by February 2022.

MyBroadband asked Knott-Craig whether he stood by what he said in his book and the allegations he made against Herotel and CIVH.

He said he had no hard feelings toward any of the parties.

“I just wrote my experience for the benefit of other aspiring entrepreneurs. It was a big boardroom battle, not life or death. Just rough and tumble,” he said.

“To me, it was hostile. To others, it wasn’t. We’ve agreed to disagree.”

Knott-Craig said it all boiled down to a difference in strategies.

“I wanted to push fibre into townships, the others didn’t,” he said.

Herotel also disputed this claim. The company highlighted that it has 338,000 fibre stands in townships and 245,000 stands in traditional suburbs.

“So, the majority of Herotel’s fibre assets are in townships. This was always part of the CEO and exco’s strategy,” it said.

“Herotel pioneered building in lower-income areas, and more than 50 such projects in different locations have been executed.”

In a subsequent request for comment, Knott-Craig said he would not be able to respond to further enquiries for several weeks as he would be travelling with his family.