South Africa could soon get a new fibre giant as rivals plot major merger

Cape Town – South Africa’s fibre market could be headed for another major shake-up as two fibre network operators backed by Old Mutual’s infrastructure investment arm assess a potential merger that could create the country’s third-largest fibre network.

According to MyBroadband, African Infrastructure Investment Managers (AIIM), a wholly owned subsidiary of Old Mutual Alternative Investments, is considering combining its two fibre businesses, Octotel and MetroFibre.

AIIM owns 100% of Octotel and holds a 37% stake in MetroFibre, making it the latter’s largest shareholder. A combination of the two networks would create a major competitor to South Africa’s two dominant fibre operators, Vumatel and Telkom’s Openserve.

The companies have confirmed that discussions are underway, although no merger has been finalised.

“Our businesses are currently assessing potential opportunities to work together in order to enhance our service offerings and our customer experience,” the report quoted a MetroFibre spokesperson as saying.

Octotel CEO Trevor van Zyl similarly said the company was examining the potential benefits of combining the businesses, adding that “Octotel is excited about the prospects this could bring and the potential benefits to our clients and customers.”

Van Zyl later told TechCentral that the companies were assessing whether there were meaningful synergies between their networks.

“It certainly makes sense to look at the synergies that exist between both those businesses,” he said.

Building a bigger fibre player

The proposed merger comes as South Africa’s fibre sector continues to consolidate.

MyBroadband reported earlier this year that Vumatel had more than two million homes passed and nearly 900,000 connected, while Openserve had more than 1.5 million homes passed and almost 800,000 connected.

A combined Octotel-MetroFibre operation would therefore significantly strengthen AIIM’s position in the increasingly competitive fibre market.

MetroFibre has also been reassessing how it expands its network. CEO Jan-Jan Bezuidenhout previously said the company had moved away from an aggressive rollout strategy and was instead focusing on strengthening existing networks and improving its approach to underserved areas.

“Instead of an aggressive new rollout, we’ve concentrated on saturating and strengthening areas in and around our existing network,” Bezuidenhout said.

The company has also been examining fibre solutions for townships, lower-income urban areas and multi-dwelling properties.

AIIM expands digital infrastructure portfolio

The potential fibre merger coincides with AIIM’s expansion into other digital infrastructure assets.

The Competition Tribunal recently approved AIIM-linked Main Street 2156’s acquisition of sole control of the JNB11 data centre in Centurion from Vantage Data Centers.

JNB11 forms part of Vantage’s Waterfall City data-centre campus, which was developed as part of a planned R15 billion investment. The facility was designed to provide 16MW of critical IT capacity across 12,000 square metres.

The developments point to a broader strategy by AIIM to build a substantial portfolio spanning fibre networks and data-centre infrastructure.

The potential Octotel-MetroFibre combination is not yet a completed transaction, and the companies remain focused on their existing operations while assessing the opportunity.

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