Maziv, the parent company of fibre infrastructure providers Vumatel and Dark Fibre Africa (DFA), has set its sights on a share of the over 12 million unconnected or underserviced homes, as it intensifies its focus on the lower income homes in South Africa.
As fibre deployments slow down across SA, the fibre infrastructure company says it is looking at unlocking the potential of internet connectivity for lower income homes, to ensure more South Africans in remote areas participate in the digital economy.
However, in order to realise its goal, more funding, strong shareholders and government support are required to support the company’s “capital-intensive” business model, said Maziv CEO Dietlof Mare.
He delivered a presentation at the Digital Infrastructure Investment Summit 2024, in Johannesburg, last week.
Mare noted that Maziv, through its subsidiaries, has since inception seen its fibre network pass over two million homes in SA, with more than 25 000 commercial buildings connected so far through its fibre-to-the-business network.
Vumatel and DFA have extensive reach throughout SA, with a combined network of over 50 000km of fibre laid, he continued.
Emphasising the need for a funding boost, Mare pointed out the next phase will require an estimated R30 billion for the business to meet its objectives to connect SA’s remote and lower income homes.
Out of the 12 million underserved or unconnected homes in SA, seven million are estimated to have some form of poor-quality connectivity, he explained.
“And we have to, as an industry, get into those markets. That’s one of the reasons why we need strong, serious shareholders that have skin in the game. And that’s why we started looking at shareholders in the market. We are a heavily-funded business that is super-capital-intensive; over R30 billion must be pumped into the ground.”
Maziv has been investing significantly in upgrading its overall network footprint and infrastructure, he continued.
A year ago, the company kicked off DFA’s R400 million fibre expansion project, to enable high-speed connectivity to more businesses around SA.
Maziv was created in 2022 by Remgro-owned Community Investment Ventures Holdings after it folded Vumatel and DFA into one giant fibre infrastructure company.
Vodacom, through a combination of assets of approximately R4.2 billion and cash of at least R6 billion, had been looking to acquire a 30% stake in Maziv, with an option to increase the stake by 10%.
However, in an unexpected move, last August, the competition watchdog recommended the merger between Maziv and Vodacom be prohibited, as it will likely lessen competition in the local fibre market.
Over the last few months, the Competition Tribunal has been holding hearings where evidence is being presented by expert witnesses relating to the proposed merger. Maziv and Vodacom are now hoping for a favourable outcome.
Responding to ITWeb’s question as to the status of the hearings and the merger, Mare said: “There’s has been no outcome of the hearings; the matter is still in tribunal state, so I can't comment any further on that.”
The company initially focused on SA’s metropolitan areas, and from 2018, started shifting to less affluent areas, with the introduction of its prepaid offering.
Following years of expansion across SA, fibre-to-the-homerollouts have significantly slowed down in 2024, mainly due to the reality that connecting lower LSM homes is often associated with more financial risk, making funding harder to secure, Mare noted.
In the first quarter of 2024, the combined fibre industry saw fibre networks pass less than 100 000 homes – a fraction of its previous track record − as the “fibre land grab” cools down, he stated.
“The difference between ours and other fibre network operators in the market is that we had strong shareholders in the beginning and that gave us the ability to scale.
“If you look at the last quarter to December, you see that the whole industry had 146 000 homes passed with fibre networks. If you look at the nine quarters before that period, the whole industry passed 346 000 homes per quarter.”
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