According to a recent MyBroadband article, Telkom is rapidly losing ADSL and fixed-line subscribers across South Africa.
The company once had aspirations to be the leading fixed-broadband provider in the country, but current figures show this is not the case:
- Telkom’s fixed-line subscribers stand at 2 267 000, the lowest since 1994
- Telkom’s ADSL, VDSL, and fibre subscribers declined from 981 176 to 847 650 in the last year
- There has been a 13.6% decline in fixed-broadband subscribers
- Independent fibre network operators (FNOs) are rolling out fibre networks faster than Telkom can
- Companies like Vumatel offer a wide range of pricing – from free for a 4Mbps line to R1,299 for a 1Gbps connection
- Vumatel’s partnership model rapidly gained momentum in South Africa, putting Telkom on the back foot
- The rush to get fibre rolled out across SA lead to a land-grab and pricing cuts, leaving Telkom on the sidelines
- Telkom is too big and too slow to respond quickly
- Today Telkom’s fibre-to-the-home market share is below 40%
- Telkom has significantly cut its fibre-to-the-home investment over the last year, decreasing the capital expenditure in its fibre network from R2.112 billion in its 2017/2018 financial year, to R1.216 billion in its 2018/2019 financial year
Remgro is in advanced talks to buy fibre provider Vumatel as South Africa’s richest man seeks to consolidate the country’s expanding broadband infrastructure industry, according to people familiar with the matter.
A deal by billionaire Johann Rupert’s investment vehicle would give an equity value of closely-held Vumatel of about 1.1 billion rand ($93 million), said the people, who asked not to be identified as the talks are private.
Rupert would then combine Vumatel with rival Dark Fibre Africa, in which Remgro owns a majority stake, the people said. The deal could still fall through, and if so Vumatel would consider selling shares on Johannesburg’s stock exchange, they said.
A spokesman for Dark Fibre declined to comment. A spokesman for Remgro said she didn’t have an immediate comment and Vumatel couldn’t immediately be reached for comment.
The deal would allow Dark Fibre, which has a network of about 10,000 km (6,214 miles), to expand into South Africa’s fast-growing fiber-to-home industry, which Vumatel helped to pioneer after entering the market in 2015. Households in cities including Johannesburg, Cape Town and Durban are increasingly seeking higher speeds and more capacity to handle rising consumption of data for services including streaming.
Dark Fibre trails Econet Wireless Global Ltd. unit Liquid Telecom in terms of network size. The company has raised 1.25 billion rand in debt funding and extended a revolving credit facility to 1.1 billion rand to fund expansion, according to its website.
Talks between Dark Fibre and Vumatel started in October and could be concluded within the next two months, said the people. Banks working on the deal include Standard Bank Group Ltd. and Investec Ltd., one of them said. Neither lender could immediately be reached for comment.
Rupert has a net worth of $8 billion, according to the the Bloomberg Billionaires Index. Johannesburg-based Remgro also owns stakes in international private hospital operator Mediclinic International Plc and South African spirits maker Distell Group Ltd.
The Q4 2017 MyBroadband Speed Test app results show that Midstream Estate, Cornwall Hill Country Estate, and Country Lane Estate have the highest broadband speeds in South Africa.
To calculate the average speed in an area, results from speed tests performed by MyBroadband Speed Test app users were compiled.
MyBroadband’s Speed Test app for Android and iOS gives smartphone users the ability to test their Wi-Fi and mobile data connections.
In Q4 2017, over 200,000 Wi-Fi tests were performed by iOS and Android users.
The average download speed over Wi-Fi in South Africa was 11.59Mbps, while the average upload speed was 6.99Mbps.
These speeds are closely linked to the average broadband speeds in the country, as most Wi-Fi connections are linked to a fixed broadband connection.
The results show that Midstream Estate was the suburb with the highest average download speed, at 42.57Mbps.
Cornwall Hill Country Estate and Country Lane Estate were second on 36.42Mbps, and Durbanville and Bellville third on 34.70Mbps.
The table below shows the suburb results. Only suburbs where a large number of tests from multiple devices were performed are listed.
Broadband Speeds in South Africa