Absa Capital buys 10% of Dark Fibre Africa

Saw this notice from ABSA Capital / I-Net and thought it might be of interest to local venture capital industry participants

Johannesburg, Sep 10 (I-Net Bridge) - Absa Capital, the investment banking division of Absa Bank Ltd, has bought 10% of Dark Fibre Africa (DFA), a local telecoms infrastructure provider, it announced on Wednesday.

Based in Centurion, DFA, installs carrier neutral broadband ducting infrastructure, and sells and maintains discrete fibre pairs, or cables, to individual telecommunications operators.

The acquisition follows last month's high court decision involving the Independent Communications Authority of South Africa (Icasa) and telecoms firm Altech (ALT) that Altech has the right to self provide its own network under its Value Added Network Service licence.

The move is expected to open floodgates of VANS licensees seeking to build their own networks, but Absa Capital's Infrastructure Equity Investment official Sollie Nortjé said many of the 300 or so VANS licensees did not have the financial muscle to roll out large networks.

He said it would make strategic and "financial sense" for VANS licensees to use DFA's network, because it would reduce the cost of building duplicate networks without affecting their competitive positions. Unlike Telkom, MTN, Vodacom and Cell C, DFA does not compete with operators - it only builds network capacity designed to be shared by operators, said Nortjé.

Nortjé's comments comes as Absa Capital announces a 10% acquisition in DFA and, along with Absa Corporate and Business Bank, finalises agreements to provide a mezzanine facility of 250 million rand and a senior debt
facility of up 700 million rand as a first round of funding to DFA.

DFA is spending 2 billion rand in the next 12 months on to deploy broadband infrastructure across South African cities, which could be leased by multiple operators.

Other major shareholders in DFA are VenFin and Community Investment Ventures.