Vodacom and Remgro eye Vumatel acquisition

CIV Holdings is in discussions to acquire Vumatel, which has built one of the largest open access fibre networks in South Africa, MyBroadband reported, citing industry sources.

Bloomberg reported previously that Remgro was in advanced talks to buy Vumatel as part of its strategy to consolidate the country’s expanding broadband infrastructure industry.

MyBroadband said it has now learnt from sources that a potential acquisition of Vumatel will happen through CIV Holdings.

Remgro is a 51% shareholder in CIV Holdings, which in turn owns numerous telecoms players – including Dark Fibre Africa (DFA), MCT Telecommunications, and Dartcom.

An acquisition of Vumatel by CIV Holdings will significantly strengthen Remgro’s position in the South African fibre market.

Vodacom interest

While news of Remgro’s possible acquisition of Vumatel is not new, it has emerged that Vodacom has also shown interest in Vumatel.

Industry speculation suggests that Vodacom may have formed part of a deal involving CIV Holdings, but this could not be confirmed by MyBroadband’s sources.

It is also not clear whether discussions between Vodacom and Vumatel are ongoing.

Vodacom CEO Shameel Joosub recently said the company wants to become a bigger player in the fibre-to-the-home market.

As part of this strategy, Vodacom plans to increase its investment in the fixed-line arena – which includes fibre infrastructure.

In an interview with MyBroadband, Joosub declined to comment on if it is looking at acquiring a stake in Vumatel.

Joosub said he can’t comment on speculation, but said Vodacom is looking at ways to grow its fibre network.

CIV Holdings were asked for comment on the matter, but said it does not comment on media speculation.

Vodacom and Vumatel stated they do not comment on market speculation, when asked about the reported deal.

Combining DFA and Vumatel

Bloomberg previously reported that Remgro would look to merge Vumatel with Dark Fibre Africa to create a large fibre player locally, which could rival Telkom and Liquid Telecom.

Dark Fibre Africa also owns SA Digital Villages, which specialises in the installation, operation, and maintenance of last-mile fibre networks.

The deal therefore makes sense for Remgro, as economies of scale is important in creating profitable telecoms companies.

The biggest sticking point, sources told MyBroadband, is price.

Vumatel’s shareholders are seeking “billions” for the company, and it can be challenging to make back such a large investment.

Read: Vumatel appoints new CEO

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Vodacom and Remgro eye Vumatel acquisition