Private equity firm AIIM set to tackle connectivity problems with increased stake in MetroFibre Networx
African Infrastructure Investment Managers (AIIM) is focusing efforts on building up its fibre platform with an increased investment in MetroFibre Networx that will take its stake in the company up to 37% and firmly positioning AIIM as the single largest shareholder.
Over the past year, MetroFibre has accelerated its fibre roll-out in South Africa with more than 350,000 homes passed as at the end of April 2022. It is aiming to pass an additional 500,000 homes by 2025.
Managing director and co-head of AIIM Olusola Lawson notes that even in a market such as South Africa which is comparatively well developed from a fibre perspective, only 2.6-million out of 16-million households in the country have been passed by a fibre connection. “We are focused on how to drive down rollout costs to allow cost-efficient access to a greater share of the population,” he says.
Part of the company’s approach includes a commitment to innovative approaches that address South Africa’s connectivity shortfalls. To this end, MetroFibre offers a pay-as-you-go model for underserved areas and packages which suit those who only require intermittent use, removing the need to commit to lengthy contracts.
The purchase of the additional 25.8% shareholding by AIIM alongside a consortium comprising South African Housing and Infrastructure Fund (SAHIF) and STOA, a foreign investment vehicle based in France, follows approval from the Independent Communications Authority of South Africa.
MetroFibre, which was launched in 2010, is a high-growth player in South Africa’s fibre-to-the-home and fibre-to-the-business markets. The company has also just had a management changeover, with Jan-Jan Bezuidenhout taking over as chief executive from Steve Booysen.
Investment director at AIIM, Thor Corry, says there is still a long way to go to address connectivity shortfalls.
“The streamlined shareholder register is united in its support for the MetroFibre management team and will provide the access to capital necessary to realise their growth ambitions.”
In the past year, AIIM has ramped up its investment in digital infrastructure with an investment in a Ghanaian data centre business and the joint acquisition of a majority stake in Eastcastle Infrastructure, a company specialising in Africa’s telecoms tower sector.
The acquisition provided Eastcastle with $130-million to fund the company’s build-to-suit strategy, to develop new telecom towers initially in Democratic Republic of the Congo, Nigeria and Côte d’Ivoire. The number of towers across the region needs to increase significantly to accelerate the deployment of bandwidth-intensive technologies such as 3G, 4G and 5G by mobile network operators and to increase quality connectivity for individuals and businesses.
Bezuidenhout noted that MetroFibre’s relatively new pay-as-you-go option is particularly important for affordable housing estates and residential areas with high rental occupancy where customers want to avoid being tied into long-term contracts or don’t need an ‘“always on” service.
The open-access fibre network operator recently upgraded and doubled line speeds on all its fibre packages, introducing a new entry-level 20Mbps package and 1,500Mbps and 1Gbps packages for intensive users from this month.
“The reality is that fast, reliable internet connections have become as important in homes as water and electricity supply for every aspect of work, education and leisure. A technological-enabled future is the only way to achieve greater economic and social inclusion for all South Africans,” says Jacques de Villiers, head of MetroFibre’s fibre-to-the-home division. BM/DM