Vuma News

Remgro reported the figures in its annual results released last week. It owns a 57% stake in Community Investment Ventures Holdings (CIVH), a holding company that owns Vumatel and Dark Fibre Africa.

During the company’s results presentation, Remgro strategic investments head Pieter Uys explained that Vumatel had to cut its capital expenditure budget significantly, all but halting new network rollouts.

While Vumatel’s revenue increased by 3.2% during the year from R3.4 billion to R3.5 billion, its operating earnings declined by 7.2%.

Vumatel’s headline earnings also swung from an R82-million profit to a R374-million loss.

This was due to interest rates that have remained high, pushing up the financing costs on Vumatel’s debt.

According to Uys’ presentation, CIVH’s debt stood at R19.5 billion by June 2024. He previously told MyBroadband that most of the debt belongs to Vumatel.

Vumatel cut its capital expenditure budget to strengthen its balance sheet, resulting in only 138,000 new homes being passed between 1 April 2023 and 31 March 2024.

The year before, it had added 403,000 homes to its network.

While Vumatel’s new network rollout slowed substantially, it did add a significant number of new subscribers.

Most of these new subscribers came from its middle-income Vuma Reach market.

Vumatel segments its products into three markets:

• Vuma Core — homes with a household monthly income over R30,000 per month
• Vuma Reach — homes with a household monthly income between R5,000 and R30,000 per month
• Vuma Key — homes with a household monthly income below R5,000 per month

Its Vuma Core market recorded a modest 2.4% increase in new subscribers from 383,019 to 392,380.

Vuma Reach, on the other hand, saw a 39.5% increase in subscribers from 240,901 to 335,971.

The Vuma Key product is still very new, with Vumatel only announcing the service’s commercial launch in Alexandra and Kayamandi last week.

It is also piloting Vuma Key in Khayelitsha.

Despite Vumatel’s dramatic network rollout slowdown, it has maintained a significant lead over former fixed-line monopoly Telkom and its Openserve wholesale and networks division.

Openserve has kept its connectivity ratio lead, reporting that 48.5% of the homes passed by its network have a fibre connection.

However, it is important to note that Openserves’s “homes connected” figure includes all homes with a fibre terminal installed. They need not have an active subscription.

Closed-access fibre operator Herotel has the third-largest network in South Africa.

The company also recently told MyBroadband that most of the homes on its network are in previously underserved areas, with 338,000 fibre stands in townships and 245,000 in traditional suburbs.

Vumatel owns a 49.5% stake in Herotel, which it hopes to increase to 100% in a transaction that is currently before South Africa’s competition authorities.

Metrofibre is in fourth place with 517,000 homes connected.

Frogfoot closes out the top five with 361,000, with Octotel close on its heels with 360,000 homes connected.

The following table lists South Africa’s biggest fibre network operators in terms of homes passed and connected.