Metrofibre eyes R500m FTTH war chest
Sep 28, 2015

Metrofibre eyes R500m FTTH war chest

MetroFibre Networx, a local provider of fibre-optic broadband connectivity solutions, has entered the fibre-to-the-home (FTTH) race in the South African market.

As the latest entrant to the market, MetroFibre Networx – headed by former Absa CEO Steve Booysen – is looking to raise R500 million in private equity from new investors to expand its footprint and challenge the established players.

MetroFibre has completed projects in excess of R40 million to date, with projects worth another R15 million that are in various stages of completion.

The fibre-optic broadband connectivity solutions provider believes that come December 2018, it would have completed 50 000 live FTTH connections in the country. It is looking to open the funding round in November and close it in March 2016, and bring new shareholders on board in the process.

“MetroFibre focuses on specific areas in Gauteng and in these areas we aim to install networks into the majority of estates and gated communities,” says Booysen. “Once all the approvals are done, we install a termination point into every unit with the permission of the owner. This enables quick activation of services should the owner decide to place an order at a later stage.

“We have noticed that usage in excess of 200G/month is not rare anymore and when this becomes the norm, capped offerings will not be a wise decision, even for normal households. The majority of the offerings in the market is still capped and shaped.”

Progress has already been made in Sunninghill, Barbeque Downs, Kyalami (including Glenferness and AH), Carlswald, Lonehill, Rivonia, Sandton, and Longmeadow. The company is also targeting Douglasdale, Broadacres, Pretoria East, Centurion and Greenstone.

Fierce competition

MetroFibre Networx’s move into the FTTH space comes as several South African companies intensify FTTH rollouts in the country. This month, Telkom announced plans to deploy fibre to a million homes by 2018. Telecoms start-up Vumatel aims to provide fibre to 200 000 houses over the next three to four years. The start-up recently revealed it will supply FTTH to six Johannesburg suburbs.

Other players in the tightly-contested market include Vox Telecom, which stepped up its fibre game with the acquisition of Internet services company, Frogfoot Networks, in July. Mobile operator MTN also said it is committed to an open access business model to cater to customers and independent Internet service providers.

MetroFibre Networx owns and manages SA’s first globally compliant Carrier Ethernet 2.0 open access fibre network, over which it connects in excess of 60 cloud, application, voice and Internet service providers with its customers.

The company has active shareholding from Sanlam Private Equity, which also has representation on the MetroFibre board. The investment house invested in the company in 2013 to grow its own fibre network.

MetroFibre says with support from its primary shareholder Sanlam, as well as its growing network of service provider customers, it is fast being recognised as not only a wholesaler of Carrier Ethernet connectivity, but also as a serious player in the local last mile fibre solutions market.

“Fibre is the way of the future for data connectivity – it is reliable, fast and cost-effective, making it the ideal solution for service providers, telco companies and the home user,” states Booysen, CEO of MetroFibre Networx. “Today we not only provide Carrier Ethernet solutions to myriad service provider customers, but are also rapidly rolling out FTTH solutions, coupled with broadband connectivity, to a growing number of residential and business areas in Gauteng.”

According to Johan van der Lith, CTO at MetroFibre, the company is leveraging its low latency, high bandwidth Carrier Ethernet connectivity to provide high-speed Internet access, real-time media streaming and other cloud services.

Biggest disruptors

BMI-TechKnowledge director Brian Neilson believes MetroFibre Networx stands a chance in the FTTH market, saying some of the biggest disruptors in the fibre market in SA to date have been smaller players.

In the FTTH market, Vumatel has made a mark and has plans to scale up to 200 000 or more households – which is the same sort of figure Vodacom is talking about, says Neilson.

According to Neilson, there is a ‘land grab’ in the fibre market, which has intensified this year. “The major players like Telkom and Vodacom are fighting back in the FTTH market, in the face of the bold moves from new challengers and the fact that neighbourhoods are getting organised, commencing with Parkhurst as the most prominent example, at least as far as media coverage was concerned.”

Apart from suburbs like these, he points out there are also the gated estates, some of which are ‘fibred up’ by developers as part of the initial civil construction.