11 Jun South Africa: The quiet giant shaking up South Africa’s telecoms market
Community Investment Ventures Holdings (CIVH) recently acquired 34.9% of Vumatel, with plans to acquire the remaining 65.1%, subject to funding and regulatory approvals.
CIVH is owned by a group of investors – Remgro, New GX Capital Holdings, Chlanich, Community Investment Holdings (CIH), and Consolidated Capital Investments.
While Vumatel and its fibre projects are well-known, not many people know about CIVH.
CIVH owns numerous telecom infrastructure players, including Dark Fibre Africa (DFA), MCT Telecommunications, and Dartcom.
DFA has built and operates over 10,000km of fibre infrastructure, which is leased to its wholesale customers on an open-access basis.
Vumatel’s 8,000km fibre network will significantly strengthen CIVH’s position in the fibre market and creates a strong competitor to Openserve and Neotel.
The open access business models of DFA and Vumatel have radically changed the South African telecoms landscape.
It has also created a more competitive fibre infrastructure market, which has accelerated fibre-to-the-business and fibre-to-the-home rollouts.
Their open access strategy lowered the barriers to entry and facilitated a far more dynamic telecommunications ecosystem.
Much more to come
CIVH non-executive chairman Pieter Uys said the acquisition of Vumatel will significantly strengthen its ability to contribute to, one day, getting broadband to every suburb, home, and business in South Africa.
“Both companies [DFA and Vumatel] will operate as independent subsidiaries of CIVH and will continue to build open-access networks across the country,” he said.
Uys told MyBroadband that CIVH continues to look for opportunities in the telecoms infrastructure market, which includes data centres.
He said demand far outstrips supply in the fibre infrastructure market, and that demand from their clients in other areas will guide their moves.
He explained that CIVH will remain focussed on offering open access network infrastructure, however, and has no plans to start offering services directly to consumers.
He said their ISP partners are doing a great job at providing Internet services on top of their infrastructure.
We paid a fair price
The amount which CIVH paid for Vumatel was not disclosed, but market speculation suggests it was “very high”.
Uys, however, said he feels comfortable with the price which they paid for Vumatel.
He said a thorough analysis of Vumatel’s assets was done and compared to their own business plans related to fibre infrastructure rollouts.
They also looked at what similar assets sold for in the market, which shows they did not pay a significant premium for Vumatel.
The new CIVH portfolio
The image below shows what the CIVH portfolio looks like after the Vumatel acquisition.