Maziv says it's ready to roll with new fibre builds — Maziv chairman Pieter Uys

Last week’s decision by the competition appeal court to set aside an earlier ruling by the Competition Tribunal blocking Vodacom’s Maziv deal – allowing the merger to proceed – will yield positive outcomes for internet access in low-income communities across South Africa.

This is according to Maziv chairman Pieter Uys, who told TechCentral that Maziv had to hit the brakes on a number of fibre builds as it had stretched its debt financing as far as it could. This meant projects in areas such as Alexandra, Soweto and Khayelitsha had to be paused.

“We have committed to spending R12-billion over the next five years to pass and connect unconnected homes – a million of these will be in lower-LSM areas. Big parts of Soweto are already done and we had already started in Alexandra. Unlocking the investment from Vodacom will allow us to continue expanding low-cost internet to other areas, like Khayelitsha,” said Uys. Maziv subsidiary Vumatel deploys lower-cost fibre in these areas through its Vuma Reach and Vuma Key solutions.

The Reach product is the more sophisticated of the two offerings, with the most expensive tier capable of 100Mbit/s download speeds. Vuma Key offers 20Mbit/s contended (shared) connections for R99/month.

Only one hurdle remains for Vodacom and Maziv to overcome. Communications regulator Icasa in 2022 conditionally approved the merger pursuant to the approval of the competition authorities. Uys said the companies will now engage with Icasa to address any of its concerns.

In a statement on Friday, Vodacom said the competition appeal court’s approval marks a significant milestone in Vodacom’s strategic efforts to expand its fibre footprint and enhance digital connectivity in South Africa.

“We are delighted with the appeal court’s decision, which paves the way for us to bring the benefits of enhanced fibre infrastructure to more South Africans. This acquisition is a cornerstone of our strategy to improve connectivity, drive digital inclusion and support South Africa’s digital economy,” said Vodacom Group CEO Shameel Joosub.

Industry-wide slowdown

But there are others who do not see the merger as a net positive for the local industry. Speaking on the TechCentral Show last week, Fibertime founder Alan Knott-Craig said there are a number of fibre operators who are building their businesses on the premise that they will be bought out one day, which is not good for the market. Watch the interview with Knott-Craig here.

“This industry was probably started by Niel Schoeman from Vumatel and he built a good business model around cashflow, but one day things started changing to flipping. You have to ask yourself where the market is going, are prices going up or down? Any fibre company where prices escalate every year doesn’t make sense to me when market and consumer expectations are that prices go down,” said Knott-Craig, referring to Vumatel. Knott-Craig and Vumatel are known to have a fractured relationship and have been competing directly to deploy fibre in Kayamandi, a township next to Stellenbosch in the Western Cape.

Read: One last hurdle for Vodacom, Maziv fibre deal

According to an industry analysis by research and advisory firm BMIT, investments in fibre roll-out across the industry have slowed since 2022, which coincided with the period the Vodacom-Maziv deal has been under investigation by the regulatory authorities.

BMIT MD Christopher Geerdts said the industry-wide slowdown was largely due to Maziv halting investment as it awaited an outcome. However, other industry players followed suit, citing market uncertainty as a result of the pending deal as the reason.

“On the other hand, there has been increasing investment reported by the new generation of fibre operators who are targeting lower-income, high-density suburbs, like Fibertime, which is expanding at a currently claimed rate of 30 000 homes a month in 30 townships,” said Geerdts.

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