Octotel, MetroFibre weigh merger to create South Africa’s third-largest fibre operator  

Octotel and MetroFibre Networx are considering a combination that could create South Africa’s third-largest fibre network operator, as competition and consolidation reshape the country’s broadband market. 

Octotel CEO Trevor van Zyl said the companies are assessing the potential benefits of working more closely but stressed that no deal has been agreed. 

The two companies have a common investor. A consortium led by African Infrastructure Investment Managers, a division of Old Mutual Alternative Investments, acquired Octotel in 2024. AIIM is also MetroFibre’s largest shareholder. 

Asked whether combining the businesses could be the next logical step, Van Zyl said the idea is still being examined. 

“It certainly makes sense to look at the synergies that exist between both those businesses,” he said. “They’re both large businesses. Collectively it would place a merged or consolidated environment as the third-largest operator in the country.” He added that a deal would bring opportunities but also “a lot of complexities.”

Companies assess possible overlap 

Van Zyl said Octotel and MetroFibre are now looking at where their networks and operations could complement each other. 

“At the moment we are assessing all the synergies, and there’s no doubt that there are definitely opportunities to explore,” he said. “We’re working within the frameworks that have been set aside by the Competition Commission, and that’s important.” 

The resolution of the Vodacom-Maziv case has also made consolidation easier to consider, Van Zyl said. But he cautioned that any transaction would have to make clear business sense. 

“What is the benefit of consolidating in the first place? That’s really what we’ve got to ask ourselves,” he said. 

Octotel’s network covers the Cape Town metro, the West Coast and the Garden Route, passing close to 400,000 homes. Van Zyl said the company still sees room to expand in the Western Cape, although much of its future growth could come from outside the province. 

There is limited overlap between the two companies in the Western Cape. MetroFibre has built much of its presence in the province around enterprise customers, while its consumer network is concentrated in Gauteng and other parts of South Africa. 

“It’s actually very little overlap with us,” Van Zyl said. “There’s a really good opportunity here in the Western Cape to leverage each other’s assets and infrastructure.”

Fibre market faces further consolidation 

Neither company is slowing its investment while the potential combination is assessed. “It would be negligent for us to slow down waiting for any sort of transaction to take place,” Van Zyl said. “We’re putting our foot flat.” 

MTN South Africa CEO Ferdi Moolman said earlier this month that the company has not ruled out acquiring fibre assets when suitable opportunities emerge and has not taken a potential Telkom transaction off the table. 

Van Zyl declined to say whether Octotel could become part of a wider consolidation involving MTN, but left the door open. 

“Anything is possible as you move forward,” he said. “If they really come along in two years’ time, three years’ time, absolutely we would have a look at that.” 

He also expects consolidation among Internet service providers as networks mature and smaller providers face greater pressure to expand. 

Octotel, founded in 2016, operates an open-access fibre network in the Western Cape, connecting homes and businesses through more than 50 Internet service providers. MetroFibre, founded in 2010, owns and operates open-access fibre infrastructure serving residential, business and wholesale customers across South Africa.