French bank takes 23% stake in South Africa’s Metro Fibre Networx

22 March 2019 | Alan Burkitt-Gray

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A French development bank has taken a 23% stake in South African fibre company Metro Fibre Networx.

The deal, for an undisclosed price, will aid Metro Fibre’s growth plans, that include establishing a national network that will continue to focus on fibre-to-the-home (FTTH) and fibre-to-the-business (FTTB).

The investment comes from STOA, an investment vehicle that is a subsidiary of France’s Caisse des Dépôts et des Consignations (CDC) and the Agence Française de Développement (AFD, the French Development Agency) to finance new or existing infrastructure in developing countries.

Standard Bank advised Metro Fibre on the transaction and was instrumental in finding STOA. The bank’s global head of telecoms, Nina Triantis (pictured), said: “This transaction is consistent with the theme that we see in the fibre sub-sector in Africa.”

Metro Fibre CEO Steve Booysen said: “For our customers, this transaction means greater access to quality and reliable fibre internet infrastructure and related products.”

Marie-Laure Mazaud, deputy CEO of STOA, said: “The telecommunications sector is a significant driver of economic growth and has direct social impact through the improvement of fast and affordable internet access in Africa.”

Metro Fibre owns its core network, which is a globally compliant Carrier Ethernet 2.0 open access network. Since it started in 2010 as a fibre connectivity provider to South African medium-to-large companies, it has expanded its service offering to both residential and corporate customers in line with its strategic objective of being a diversified operator.

Its FTTH offering, launched in 2015, focuses on the northern suburbs of Johannesburg and Pretoria in Gauteng province.

Booysen said: “The successful capital raise enables us to further expand our infrastructure and capabilities off an already strong base while growing rapidly to achieve mass-scale in a highly competitive and fast paced telecommunications sub-sector.”

Triantis added: “The provision of fibre products and services has experienced tremendous growth and offers attractive returns to investors, despite the increasing competition. To support this growth, operators continue to raise capital from both debt and equity providers.”

Mazaud, a former global head of project finance at Alcatel-Lucent, said: “This transaction, which is our third investment in a major infrastructure project, will allow us to collaborate with a strong fibre operator in South Africa and to support a fast-growing company in a dynamic market with increasing demand.”

She added: “We are really confident with our partnership with Metro Fibre and are looking forward to supporting the management to take advantage of new opportunities, reach a critical size and bring top tier connectivity to homes and businesses in the country.”