In an evolving landscape for South Africa's telecommunications sector, Frogfoot Networks is positioning itself as a key player by actively pursuing acquisitions of smaller fibre network operators (FNOs). The company’s CEO, Shane Chorley, articulated this aggressive strategy during a recent interview on the TechCentral Show, signaling Frogfoot’s commitment to expanding its footprint in affluent suburban areas across the country.

Frogfoot's strategy revolves around a focused acquisition approach, particularly targeting small operators that serve communities with fibre infrastructure networks comprising fewer than 10,000 homes. “We have done a couple of those already and we’ll continue to do that,” Chorley stated, emphasizing the company's commitment to adapt and grow through these partnerships.

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This strategy aligns with a broader expectation within the industry: that larger fibre network operators are anticipated to become available for acquisition in the coming years. Chorley remarked, “And then in time, there might be a much bigger consolidation of one or two of the bigger ones,” encapsulating a trend of consolidation expected to sweep through South African FNOs.

“I think we should see a consolidation in the leafy suburb FNO space continue. And we want to participate in that,” Chorley noted.

This growth strategy has been facilitated by significant financial backing. In August, Frogfoot, alongside its affiliate service providers Vox and prepaid fibre brand Hypa, successfully raised new equity and expanded their debt facilities in a deal that elevated the businesses' valuation to R14.4 billion (approximately $1 billion). Much of this new capital is earmarked for expanding services in under-served township areas, with ambitious plans to escalate its connectivity reach from 80,000 new connections annually to a staggering 360,000.

Chorley highlighted a crucial distinction in the nature of consolidation in different market segments, indicating that while Frogfoot seeks growth through agglomeration in wealthier suburbs, he does not foresee a similar trend infiltrating the township markets where

Our Take

Frogfoot's strategy of acquiring small fibre network operators signals a shift towards consolidation in South Africa's telecom market, emphasizing growth in affluent suburbs while maintaining focus on organic expansion in underserved areas.

Quick Answers

What is Frogfoot's strategy for growth in South Africa?

Frogfoot plans to acquire small fibre network operators in affluent suburbs and expects larger networks to become available for sale in the coming years as part of its growth strategy.

How many connections does Frogfoot aim to build annually in townships?

Frogfoot aims to increase its build rate in townships from about 80,000 connections a year to 360,000 connections annually.

What is the expected trend for fibre network operator consolidation in leafy suburbs?

Frogfoot's CEO Shane Chorley expects continued consolidation among fibre network operators in leafy suburbs, indicating a strategy to participate in that process.

Is Frogfoot likely to be acquired in the near future?

According to Abraham van der Merwe, Frogfoot is unlikely to be absorbed soon as the company aims to grow organically and its management is patient with long-term ownership of the business.

What is Frogfoot's stance on participating in low-Earth orbit satellite broadband?

Frogfoot has no plans to engage in low-Earth orbit satellite broadband technology, preferring to focus on connecting dense township areas with its own infrastructure.