South Africa: Vumatel not ready to sell

21 April 2017


South African fibre-to-the-home pioneer Vumatel is receiving constant interest from bigger telecommunications companies wanting to acquire it, but the company is not yet ready to “succumb” as it still has “a lot of interesting stuff” it wants to do as an independent player.

That’s the word from Vumatel CEO Niel Schoeman, who was speaking to TechCentral in a podcast interview on Tuesday. If anything, the company will continue to play a consolidation role in the industry rather than being swallowed itself. It has already acquired Johannesburg-based Fibrehoods and Durban-based Estate Connexions.

“I suppose we are being inundated with approaches, which is natural at the moment,” Schoeman said in the podcast. “The mobile operators need to go into the fixed-line space — it’s no secret that they have to do that to provide converged services. Other infrastructure providers are expanding their footprint.

“We have some plans we still need to fulfil before we succumb, and I’m not sure we will succumb. We have a lot of interesting stuff we still want to try and do,” he said.

The regulatory environment will make an acquisition by one of the big industry players difficult, Schoeman said. “For example, Telkom acquiring us? I can’t see that ever happening. I can’t see that passing regulatory muster.”

Similarly, the dominance of the big mobile operators could also result in close regulatory scrutiny of any deal to acquire Vumatel.

Meanwhile, there are a number of smaller players that could help Vumatel consolidate its position in the market. Some smaller fibre-to-the-home operators will struggle for scale; others may go to the wall, said Schoeman. Read the full article on Techcentral here: