Information on the Target

Actis has recently celebrated its exit from Octotel, a prominent South African fibre broadband provider, which has seen significant growth under Actis’s ownership. At the time of investment, Octotel provided fibre connectivity to 195,000 homes. By the time of exit in September, this number surged to approximately 350,000 homes passed with fibre optics, while the customer base expanded from 56,000 to 110,000.

This growth reflects not only the increasing demand for high-quality internet access in South Africa but also the effectiveness of Actis’s strategic initiatives aimed at bettering community engagement and expanding network infrastructure.

Industry Overview in South Africa

In recent years, South Africa's digital infrastructure sector has experienced rapid transformation driven by increased demand for internet connectivity. The fibre broadband market, in particular, has been expanding as both residential and business consumers seek reliable and high-speed internet solutions. This surge has been influenced by factors such as the rise in remote working, online education, and the digital economy.

Government initiatives and private investments have further stimulated growth in this sector. Policies facilitating investment in broadband infrastructure and partnerships with private companies have fostered an environment conducive to technological advancements. The challenge remains to extend networks into underserved areas, where connectivity rates still lag significantly behind more urbanized locations.

According to market analysts, the growth trajectory of South Africa's digital economy suggests that the fibre broadband segment will continue its upward trend. Expanding fibre networks is pivotal in meeting the needs of the population, as digital inclusion becomes increasingly critical in ensuring equitable access to information and services.

Furthermore, social considerations are becoming an integral part of infrastructure investments. As evidenced by companies like Actis, integrating social initiatives along with network expansion can markedly enhance community relations and address digital literacy challenges in historically underserved areas.

The Rationale Behind the Deal

Actis’s investment in Octotel was driven by the vision of creating a robust digital infrastructure while fostering community development and sustainability. By prioritizing social initiatives alongside business expansion, Actis aimed to position itself as a leader in responsible investment in Africa's growing digital landscape.

The remarkable growth of Octotel's network and customer base during Actis’s ownership not only highlights the effectiveness of this strategy but also underscores the importance of digital access in empowerment, which dovetails with Actis’s commitment to ESG principles (Environmental, Social, and Governance).

Information About the Investor

Actis is a leading investor in sustainable infrastructure across emerging markets, with a strong focus on sectors that drive social and economic value. With a commitment of US$1.7 billion to the growing digital infrastructure sector, Actis has positioned itself as a significant player in redefining how investments can catalyze both returns and societal impact.

The firm’s strategic approach is grounded in identifying opportunities with the potential for transformative growth; Actis has consistently emphasized the importance of ESG factors in its investment decisions, implementing practices that not only enhance financial returns but also create positive change in local communities.

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Based on an expert analysis, Actis’s exit from Octotel aligns with a trend of successful investments in the digital infrastructure sector within emerging markets. Their strategic focus on both expansion and community impact illustrates a forward-thinking approach that resonates well in today's investment landscape, where ESG considerations are becoming increasingly essential.

The growth metrics achieved during Actis’s ownership of Octotel—marked by substantial increases in customer base and fibre connectivity access—demonstrate a well-executed investment strategy that could serve as a benchmark for future deals. Actis has effectively proven that it is possible to yield profitable returns while making meaningful contributions to societal well-being.

Moreover, the award bestowed upon Actis at the IJGlobal ESG Awards 2024 not only marks recognition of their efforts but also signifies the potential for similar investment opportunities in the sector. However, prospective investors should remain cognizant of the broader market dynamics and the necessity of continuous innovation to stay ahead in the rapidly evolving digital landscape.

In conclusion, the investment in Octotel represents a commendable case where financial viability and social responsibility intersect, positioning Actis as a model for future investment strategies in digital infrastructure across Africa.

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