Vumatel earmarks R3bn for FTTH

Mergers, Acquisitions and Financial Results

South African fibre-to-the-home (FTTH) specialist Vumatel has announced it has reached a significant finance deal with Standard Bank and will spend R3bn (USD208.6 million) over the next two years to dramatically increase its operations

The new investment will give the company the resources it needs to speed up broadband fibre delivery while opening up new markets.

Vantage Capital is providing mezzanine financing ( this is debt capital that gives the lender the rights to convert to ownership or equity interest in the company if the loan is not paid back on time and in full).

Although neither Vumatel nor Standard Bank has said how much cash is involved, they have described it as "one of the largest fund-raisings of its kind in the FTTH industry to date".

Vumatel CEO Niel Schoeman, speaking to TechCentral, said: "It is important that South Africa keeps pace with the rest of the world. We need to ensure that we invest in long-term sustainable infrastructure that can support the growth in demand for high-speed connectivity. That is why we plan to invest R3bn over the next two years in fibre-optic networks to service the residential sector."

Vumatel started rolling out in Parkhurst, Johannesburg 18 months ago and has been expanding into suburbs in both Gauteng and Cape Town.

It now sees an opportunity to take the fight to incumbent fixed-line operator Telkom, which has also made statements recently about stepping up its FTTH roll-out plans.
Source: Global Telecoms Business 20 April 2016