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Vumatel is one of the most prominent players in South Africa’s fibre internet market. Now, it’s received some significant financial muscle courtesy of a deal with Standard Bank.
The service provider has announced a deal with the bank which is “likely to be one of the largest debt capital raising-based deals of its kind in the fibre-to-household industry”, it said in a statement.
The move comes after it launched its first residential fibre network to residents of Parkhurst, Johannesburg in August 2014.
“Since its launch less than 18 months ago, Vumatel, as a supplier of high-speed fibre connectivity to homes, has become one of the leading providers of broadband connectivity to South African suburbs,” said Andrew Somerville, Head of Business Development, Commercial Banking at Standard Bank, in the statement.
“The fact that an agreement with Vumatel was reached a mere 18 months after the launch of the company is a tribute to the entrepreneurial stature of the three principals. Vumatel has a management team that have a proven entrepreneurial record and it is their outstanding business records that created the impetus for Standard Bank to become involved with the project. This is a transaction about creating South Africa as a better and globally competitive country for its citizens.”
Somerville also noted that Vumatel delivers free uncapped, open-access fibre infrastructure to every school it passes during a roll-out phase.
“This approach is aligned with the bank’s desire that social investment should always be an integral part of business operations,” the Standard Bank representative explained.
Vumatel CEO Niel Schoeman said that it planned to spend R3-billion over two years on deploying fibre networks for residential use.
The company said it has launched services in “many” other Gauteng suburbs and was targeting “further growth” in Cape Town.
“The information super-highway is a requirement for the development and growth of national economies. It is through our ability to assist pioneering companies like Vumatel that Standard Bank is part of a growing sector that will enhance communication and create opportunities for South Africans. This is essential if we are to be part of an increasingly information-driven world,” said Ben Kruger, Standard Bank Group Chief Executive, in the statement.