MetroFibre secures R2.5 billion in debt financing from Investec to expand fibre coverage

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The importance of internet connectivity has been thrust into sharp relief in South Africa over the last 12 months. While many of the major metropolitan areas across South Africa enjoy connectivity, many locals in outlying areas aren’t able to get access to a reliable fixed line internet connection.

With that in mind, on the back of securing R1.5 billion in equity funding, MetroFibre is set to benefit from a R2.5 billion debt funding injection arranged by Investec.

This funding will be used to address demand for fibre connectivity in outlying regions.

“There’s a massive demand for fibre connectivity in many outlying regions. Filling that gap makes sense not only from a business perspective, but also from a socioeconomic upliftment standpoint,” said financial director for MetroFibre, Wayne Edwards.

“We believe the fibre market has reached a tipping point. People are spending more time in their houses which has drastically increased the demand for high-bandwidth internet services, both for the purposes of working from home, education and for entertainment,” added the financial director.

With this funding as well as funding from a capital raise in 2020, MetroFibre plans to expand its existing network to reach an additional 300 000 residential homes by 2024.

While that seems like a low figure considering the amount of funding MetroFibre has access to we should point out that laying fibre is a costly exercise. As MetroFibre is targeting outlying areas, existing infrastructure needs to reach those areas before fibre can be installed. All these costs add up and this is one of the reasons fibre deployments have happened largely in major metropolitans up until now.

“The fibre market moves quickly so we need a finance partner that can do the same. Investec has been with us from the beginning, so they understand our business model and what we are working to achieve. We are immensely excited about taking the benefits of high-quality fibre connectivity to the country as a whole. And for that journey to be successful, having the right partners remains paramount,” said Edwards.

We’re curious to see what counts as an outlying area and how quickly coverage comes to those areas.

While we appreciate the complexity of laying fibre and insuring the infrastructure is in place, with the spectrum auction delayed until who knows when, maybe fixed-line connectivity providers can pick up the slack and help the unconnected.

[Image – CC 0 Pixabay]

Brendyn Lotz

Brendyn Lotz

Brendyn Lotz writes news, reviews, and opinion pieces for Hypertext. His interests include SMEs, innovation on the African continent, cybersecurity, blockchain, games, geek culture and YouTube.