Vox Telecom drops hints it’s getting into the media biz
Fibre network provider is bulking up for expansion
More consolidation in South Africa’s fibre industry is likely because many players have not been able to build sufficient size, says Vox Telecom CEO Jacques du Toit.
Vox, which itself is said to be up for sale, will consider mergers and acquisitions as part of its growth plans.
“I think we’re perfectly positioned [to consolidate the market]. We’ve been disruptive in the services space and in infrastructure and we’ve proven that we can diversify – there are now 28 product sets in our portfolio,” said Du Toit.“We’ve also done more than 40 acquisitions in recent years so we understand what it takes to identify the right business and integrate it. There are definitely companies out there that don’t have scale and the market’s going to get tougher.”
Citing people familiar with the matter, Bloomberg said earlier in June Vox’s shareholders were looking to sell the group to new owners for about R3-billion to take advantage of the wave of consolidation. Owners including Rand Merchant Bank and lender Investec saw an opportunity to exit, said the people.
Vox generated earnings before interest, taxes, depreciation and amortisation (ebitda) of about R300-million in its latest financial year. In addition to fibre, the group offers communication, cloud, outsourced technology, Microsoft consulting and other services.
Meanwhile Remgro, via its fibre unit, said earlier in June it had bought a large stake in Vox rival Vumatel.
At the same time, mobile operators are also targeting fibre acquisitions as their traditional voice revenues decline.Cell C recently bought two small fibre businesses and CEO Jose Dos Santos said in February the operator was in discussions with other potential targets. Vodacom CEO Shameel Joosub has said SA’s biggest mobile operator needs “a bigger play” in fibre.
Du Toit said Vox’s R550-million capital expenditure drive “has paid off – we saw 30% ebitda growth last year” and the company was winning market share.
Vox had about 40,000 consumer customers, as well as 20,000 small business and 20,000 corporate customers.
The company had invested in national long-distance fibre routes and was pushing into underserviced secondary towns and cities, including Richards Bay, Du Toit said.
“We’ve got a pipeline of 150,000 homes that we want to pass, so on the infrastructure build programme there’s lots of work still to do.” Vox also had a meaningful fibre-to-the-business pipeline, he said, adding that the fibre market was far from saturated.
In early May, Vox launched an Internet of Things (IoT) business, with an initial focus on tracking agricultural assets, while the group would also soon launch “a totally unconventional media play” that would not involve set-top boxes or locked software.