Vumatel takeover of Herotel clears a major hurdle

The Competition Commission has recommended that the Competition Tribunal approve the proposed acquisition of fibre provider Herotel by Vumatel.

The recommendation was made with conditions to address competition concerns.

This will require Vumatel to maintain Herotel’s pre-merger open access, and to continue privind service on terms that are “transparent and non-discriminatory”.

Vumatel has also made a public interest commitment to roll out fibre in low-income areas.

Vumatel is wholly controlled by Community Investment Ventures Holdings (Pty) Ltd (CIVH), which also controls several firms, including Dark Fibre Africa DFA.

The group is ultimately owned by Remgro.

The group is a major fibre network operator that provides wholesale fibre-to-the-home (FTTH) and fibre-to-the-business (FTTB) infrastructure at the last-mile level to internet service providers (ISPs).

DFA largely offers wholesale metropolitan fibre to fixed network operators, mobile network operators and other downstream companies requiring access to its fibre network.

Herotel operates at the national fibre infrastructure, last-mile fibre infrastructure, retail internet access services and fixed wireless access (FWA) levels of the telecommunications market.

Vumatel and CIV announced that the fibre operator had acquired a 45% non-controlling stake in Herotel in February 2022, and later increased its holding to 49.96%.

In August 2022, Vumatel announced that it wanted to increase its share in Herotel to 100% to help it expand its coverage of South Africa’s secondary cities.

The group aims to rapidly expand into rural areas.