In a sign of ongoing consolidation and deal-making in SA’s telecom infrastructure industry, Frogfoot Networks has acquired the fibre assets of American Tower Corporation (ATC) in the country.
On Friday, Frogfoot — the open-access infrastructure unit of technology and telecom operator Vox — said it had acquired the fibre assets of American Tower Africa, a provider of wireless and fibre infrastructure in SA, for an undisclosed sum.
US-based ATC is a real estate investment trust that owns, develops and operates wireless and broadcast communications infrastructure in several countries. The group, valued at $88.5bn (R1.6-trillion) on the New York Stock Exchange, has been a “key partner” to Frogfoot since 2017.
The company has more than 2,600 cellphone towers and over 11,000km of fibre in SA.
Frogfoot CEO Shane Chorley said in a statement the acquisition was a natural extension of the partnership with ATC. The integration of the assets into its fibre network would allow Frogfoot to expand its existing network and bolsters the quality and reliability of service to its customers.
“Our partnership has been built on mutual trust and shared goals, and the acquisition aligns perfectly with our long-term strategy of strengthening and expanding Frogfoot’s network capabilities”.
Co-investment, or at least the pooling of resources, is the direction that the industry is moving in when it comes to capital expenditure.
New data from the Internet Service Providers’ Association of SA and 28East, a mapping specialist, shows that 27-million South Africans, or about 46% of the population, live in areas that are not yet covered by fibre.
Seeing the opportunity, SA’s banks, particularly RMB and Standard Bank, have been looking to capitalise on the opportunity.
Maziv secured a R25bn loan led by Standard Bank for a fibre expansion initiative in late 2023.
As with the R10bn spent annually by Vodacom and MTN in recent years to cover 99% of the country with their mobile networks, a similar effort is needed in fibre, coming at immense cost. As such, operators are finding ways to pool their resources and share the risk.
Those that can build continue to do so, while deals are made in other quarters to acquire existing infrastructure portfolios.
Unfortunately, regulators have not yet embraced the direction in which the sector is moving.
Vodacom and Remgro’s push for a fibre joint venture has faced fierce opposition from local authorities. The Competition Tribunal announced in October its decision to block their tie-up.
The proposed deal would result in Vodacom taking a 30% stake in Maziv, which houses Remgro’s fibre units Vumatel and Dark Fibre Africa — together worth about R13bn — with the option of increasing the stake to 40%.
Chorley said the acquisition underscores Frogfoot’s commitment to sustainable growth and investment in high-quality network infrastructure.
“As we take this next step, we remain dedicated to providing seamless connectivity and superior service to businesses and homes across the regions we serve,” he said.
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