(Ecofin Agency) - Spurred by a rapid digital transformation, competition in South Africa’s internet market keeps getting tougher. Several industry players are consolidating to improve the quality of their services in this challenging landscape.

Afrihost, the South African internet service provider (ISP) can now acquire its rival, CipherWave Home-Connect, from CipherWave Networks. The ISP obtained the approval of the Competition Commission of South Africa (CompCom) to do so on July 3.

The Commission approved the deal, stating that it was unlikely to significantly impact competition in relevant markets. It also highlighted that the acquisition did not raise significant public interest concerns.

Afrihost reached an agreement with CipherWave Networks in May to acquire a majority stake in Home-Connect for an undisclosed amount. Similarly; the exact stake the ISP will be taking hasn’t been disclosed. However, both parties confirmed that Home-Connect will continue to operate independently.

"Through this transaction, Home-Connect and Afrihost aim to leverage the economies of scale of a larger network to continue providing super-fast, truly uncapped internet service at affordable prices," CipherWave Networks stated.

This agreement comes two years after Afrihost acquired a majority stake in Cool Ideas, also for an undisclosed amount. The company also holds a majority stake in Axxess, another leading internet service and hosting provider in South Africa.

These investments align with Afrihost's ambition to consolidate its position in the South African internet market; a market where demand for high-speed internet keeps growing and where competition gets ruder. In the fiber optic segment, there has been consolidation among players. In May 2022, Community Investment Ventures Holdings (CIVH) merged its subsidiaries Vumatel and DFA to form a mega fiber optic company known as Maziv.

Isaac K. Kassouwi