Fibre operator Vumatel has acquired a 45% non-controlling stake in Herotel, which it says is a significant fixed wireless internet service provider and meaningful player in the local fibre-to-the-home (FTTH) industry.
However, the Remgro-controlled Vumatel did not disclose the financial details of the transaction.
In a statement, Vumatel says Herotel has passed over 150 000 homes and business users to the internet across more than 400 towns and cities.
The acquisition will accelerate Herotel’s vision of bridging South Africa’s digital divide, fostering economic growth and connecting more of the country’s secondary communities, it adds.
The deal comes as Herotel was positioning itself to become a national fibre player, as the competition in the market continues.
Herotel began its journey in 2014 by consolidating 33 independent internet companies that covered hundreds of small towns across the country.
The fibre network operator recently told ITWeb that these firms united around a common cause: “a burning desire to bring world-class internet to all South Africans, including those in small towns and rural areas”.
The company recently shook-up the local fibre market when it announced revised FTTH pricing, including a 50Mbps symmetrical uncapped option for R499 per month.
Herotel boasts that all of its products are symmetrical (the download and upload speeds are the same) with no fair use policies, and includes free installation and a free-to-use router.
“Herotel will benefit from this deal by immediately being able to continue its plans for the deployment of fibre connectivity solutions in South Africa’s secondary cities and towns – effectively allowing more people throughout the country to access unlimited high-speed internet,” says Dietlof Mare, chief executive officer at Vuma.
“Most importantly, this investment has the future potential to unlock even greater opportunities for both Vuma and Herotel to access, connect and uplift more communities in the future, connect even more schools to unlimited fibre connectivity, and empower lives throughout the country.
“Vuma will continue building, owning and operating high-speed fibre-to-the-home networks using a wholesale open-access model. Vuma’s model has so far passed just under 1.5 million homes and deployed over 31 000km of fibre infrastructure across South Africa,” says Mare.
Amid the heightened activity in the South African fibre market in recent years, industry players have long believed the next phase will likely result in further consolidation as fibre network operators plan to extend their reach.
“Herotel‘s vision is to connect as many South African communities to faster, more affordable internet as possible, and we’re confident this deal will help accelerate this vision,” says Francois Wessels, chief financial officer at Herotel.
“We believe Vumatel is as dedicated as we are to bridging the digital divide in building world-class infrastructure that will allow more communities throughout the country access to high-speed, abundant internet access."
“This transaction represents yet another significant milestone in the rollout of fibre connectivity into some of the most vulnerable and unconnected areas of our country and will help narrow the digital divide and contribute to a more inclusive economy with greater access to digital opportunities,” says Raymond Ndlovu, CEO of CIVH, a business unit of Remgro, which controls Vuma.
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