Vumatel and DFA Parent Company Reports R141 Million Loss Amid Fibre Expansion and Security Costs

Community Investment Ventures Holdings (CIVH), the parent company of fibre network operators Vumatel and Dark Fibre Africa (DFA), has reported a loss of R141 million for the six months ending December 31, 2024.

The financial results, released by JSE-listed investment holding company Remgro, show a significant decline from a profit of R6 million in the previous reporting period.

This financial strain comes as CIVH’s newly-formed fibre entity, Maziv, is seeking regulatory approval for a R14 billion merger deal with Vodacom—a move that could reshape South Africa’s broadband landscape.

Mounting Security and Maintenance Costs

One of the key factors contributing to the loss is the sharp increase in security-related and maintenance expenses. Both Vumatel and DFA have been targeted by construction and extortion mafias, leading to the withdrawal of services in certain areas, such as Khayelitsha.

To protect workers and maintain service levels, CIVH has significantly ramped up spending on security and network maintenance. However, this has put pressure on its earnings before interest, taxes, depreciation, and amortisation (EBITDA), leading to short-term financial strain.

Vumatel and DFA Revenue Performance

Despite the loss, both Vumatel and DFA continue to show revenue growth:

• Vumatel: Revenue increased by 11.1% to R2 billion, driven by fibre expansion and a growing subscriber base. The company remains a market leader in fibre-to-the-home (FTTH) services, holding a 33% market share in South Africa.

• DFA: Revenue grew by 3.5% to R1.38 billion, fueled by demand in the fibre-to-the-business (FTTB) sector. The company now boasts over 14,351 km of fibre infrastructure across major metros and smaller cities.

CIVH’s total revenue for the period increased by 7.9% to R3.38 billion, while EBITDA grew 6.5% to R2.2 billion, highlighting a strong operational performance despite financial setbacks.

Vodacom-Maziv Merger Faces Regulatory Hurdles

CIVH’s planned merger with Vodacom remains in regulatory limbo.

The Competition Tribunal blocked the R14 billion deal in October 2024, citing competition concerns. However, CIVH and Vodacom have filed an appeal, with hearings scheduled for July 22-24, 2025.

If approved, the merger could significantly expand fibre access in lower-income areas, making high-speed internet more affordable and driving economic growth.

Growth vs. Financial Pressure

Despite short-term losses, CIVH remains committed to fibre expansion and long-term profitability. The company continues to reinvest excess cash flow into its network while managing the impact of rising security costs and regulatory challenges.

With the Vodacom deal still pending, the future of South Africa’s fibre industry hangs in the balance. The coming months will be crucial in determining whether this ambitious merger can proceed and deliver on its promise of broader digital inclusion.

{Source IT Web}

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