8 million homes missing out on fibre in South Africa

As of last year, 4.5 million South African homes have been passed by a fibre network operator, BMIT founder and director Brian Neilson has said.

Neilson said this figure takes into account homes passed by more than one operator, referred to as “overbuild” in the industry.

Stats SA estimates that there are over 19 million households in the country, however Neilson noted that the addressable market for residential fibre is around 12.5 million homes.

Therefore, 36% of South Africa’s estimated maximum addressable market for fibre-to-the-home currently has access to a fibre broadband network. Eight million reachable homes still do not have fibre.

Breaking fibre coverage data down by income demographics, Neilson said wealthier neighbourhoods enjoy close to total coverage with over 50% fibre uptake. There is also 25% overbuild in these “leafy suburbs”.

Middle-income neighbourhoods in South Africa are about halfway covered and 16% of homes have fibre, whereas low-income neighbourhoods enjoy little coverage with less than 0.5% homes using fibre.

While several fibre network operators (FNOs) have identified middle- and low-income neighbourhoods as their next major growth segment, progress in rolling out to these areas has slowed to a crawl.

An analysis of the homes passed figures over six months for South Africa’s largest FNOs shows that Openserve and Frogfoot were the only companies still rolling out at any speed at the end of last year.

However, Telkom also cut the capital expenditure budget of Openserve’s fibre division by 12.7% in its last financial year from R1.59 billion to R1.39 billion.

Vumatel added the second-most homes over a six-month period (46,416), but this was only 2.3% growth relative to its coverage footprint, which remains the largest in the country.

Openserve’s additions were nearly double Vumatel’s at 88,930, representing 6.4% growth relative to its existing coverage.

Frogfoot’s footprint also grew by 6.4%, but off a much smaller base than Openserve and Vumatel. Frogfoot is South Africa’s fifth-largest FNO, with Herotel and Metrofibre reporting more homes passed and connected.

Fibre rollout slowdown in South Africa

There are several possible explanations for the slow pace of fibre rollouts in South Africa, however the primary reason is that the most aggressive operators have reached the limitations of their balance sheets.

In simple terms — Vumatel can’t borrow any more money and now needs to sweat its assets to pay down debts before it can continue its aggressive rollouts.

With the market leader dialling down its capital expenditure, much of the rest of the market is comfortable to follow suit.

This allows them to wait and see what the outcome of the appeal against the Competition Tribunal’s rejection of a proposed transaction between Vumatel parent Maziv and Vodacom will be.

Trade and industry minister Parks Tau has joined the appeal, which the Competition Appeal Court will hear on 22–24 July 2025.

Vodacom announced in November 2021 that it had entered into a deal to buy a stake in the fibre assets of Community Investment Ventures Holdings (CIVH), which owns Vumatel and Dark Fibre Africa.

The deal between Vodacom and CIVH would see the companies pool their fibre networks, with Vodacom owning a minority but co-controlling stake in the combined entity.

That combined entity is Maziv, a company established specifically to hold CIVH and Vodacom’s fibre assets and facilitate the transaction.

Vodacom had offered a combination of assets and cash of at least R13.2 billion for a 30% shareholding.

That included an initial cash consideration of R6 billion, Vodacom’s fibre assets worth R4.2 billion, and a secondary purchase based on CIVH’s valuation when the deal went through, estimated to be roughly R3 billion.

Vodacom also had the option to increase its stake to 40%. The transaction was submitted for regulatory approval, where it languished for years.

Herotel, which targets smaller towns, was in a similar position to Vumatel in that it needed a cash injection to continue its aggressive rollouts.

A transaction for Vumatel to buy out Herotel was also before the competition authorities for years, but this has recently been approved and should allow the third-biggest FNO to speed up its rollouts again.