Vodacom remains on lookout for M&A opportunities, although next‑generation network expansion has recently dropped down his to‑do list.
Vodacom Group Chief Executive (CEO) Shameel Joosub confirmed the operator remained keen on a fibre infrastructure buyout in South Africa (SA), despite past failed attempts to bolster its fixed-line broadband credentials.
Speaking during Vodacom’s results presentation for the year to 31 March 2020 (FY19–20), Joosub confirmed it was “interested in expanding in fibre, both organically and inorganically”.
“We are still looking at fibre. We still think from a strategic perspective we need a bigger play in the connectivity space, in all forms of connectivity.”
Vodacom has been mooted as a fibre buyer in SA for several years. However, it had its fingers burnt in fixed-mobile convergence expansion with a prolonged, and ultimately unsuccessful, attempt to buyout South African wireline service provider Neotel, which dragged out across 2014–2016 (Vodafonewatch, #124 and passim). The knockback was doubly galling for the operator as Neotel held 4G‑and 5G‑friendly spectrum rights alongside its fixed assets, and one of Vodacom’s main, ongoing strategic headaches has been an inability to persuade SA’s authorities to free up new licences for mobile broadband.
Neotel ultimately ended up in the hands of regional player Liquid Telecom SA, with which Vodacom has partnered to expand and deepen its mobile data service in SA, using some of those frequencies.
Since 2016, fibre expansion — whether in-house or M&A-based — has appeared to fall down the management agenda at Vodacom, with Joosub and his team emphasising focus on expansion through new enterprise partnerships and digital services, as well as closer integration with Vodafone functions. Across Vodacom’s territories, the operator had just 51,000 fixed broadband subscribers at 31 December 2020, against a mobile base of 86.4 million. It passed 104,000 homes and businesses with fibre at the same date.