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More Industry InsightsMost valuable telecoms companies in South Africa

April 26, 2021by myles0
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South Africa has two of the world’s most successful mobile operators – Vodacom and MTN – which are dominating telecoms in Africa.

Vodacom and MTN were founded in 1993 after cabinet ministers authorised two cellular licenses for the country.

Although the ANC wanted cellular to be a separate, autonomous parastatal service offered by Telkom, negotiations resulted in two licenses being issued.

The first license was awarded to Telkom which partnered with Vodafone and the Rembrandt Group to form Vodacom.

Mobile Telephone Network (MTN) was announced as the winner of the second cellular license.

The competition between Vodacom and MTN resulted in two of the strongest ICT companies ever in Africa.

After MTN established a strong foothold in South Africa, it shifted its focus to an African expansion and launched operations in over 20 countries.

Vodacom, which was prohibited to expand north of the equator because of its agreement with Vodafone, focused its attention on the South African market.

Both companies achieved tremendous success in the countries where they operate and have become the two largest telecoms operators in South Africa.

Telkom enjoyed a legally protected monopoly in the first decade of democratic South Africa and therefore dominated the market during this time.

This changed after Telkom made the questionable decision to sell its 50% stake in Vodacom in 2008 and start its own mobile operator – 8ta.

Telkom changed its strategy multiple times over the next decade and is now hanging its hat on its mobile division for future growth.

The market is lukewarm on Telkom’s prospects and its share price is currently trading at around the same levels as it did in 2009 following the Vodacom sale.

Telkom, however, remains a big player in the South African fixed-line market with the largest fibre network in the country.

Newcomers in the South African telecommunications market – CIVH and Rain – are showing strong growth.

CIVH’s largest subsidiaries are DFA and Vumatel with a strong foothold in the South African fibre market.

Vumatel, for example, is South Africa’s largest fibre-to-the-home network operator with over 19,000km of fibre assets.

Rain, in turn, has shown strong growth over the last year thanks to strong demand because of the prolonged lockdown.

This has helped to increase Rain’s valuation to R17.1 billion, up from R15.0 billion just six months ago.

Most valuable telecoms companies in South Africa

The table below provides an overview of the largest telecommunications companies in South Africa based on market cap and official valuations.

It should be noted that the official valuations only give a rough overview of the value of a company as it can exclude debt, loans, and the like.

Most valuable South African telecoms companies
CompanyMarket Cap/Valuation
VodacomR232 billion
MTNR174 billion
TelkomR20 billion
CIVHR19 billion
RainR17 billion
Blue Label TelecomsR4.1 billion
SeacomR2.9 billion
MetrofibreR1.9 billion

Source: My Broadband

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