Remgro’s R42.5 billion valuation of Vumatel and DFA investigated

Remgro values Maziv, which owns Vumatel, DFA, and Herotel, at R42.5 billion. This is far more than Telkom, which has far better assets and finances.

This raises the question of whether Remgro overvalues Maziv, or whether the company has sufficient potential to justify this high valuation.

To answer this question, Newsday investigated Maziv’s valuation using publicly available information, including Remgro’s and Telkom’s financials.

The first question is whether there would be benefits for Remgro to increase the valuation of Maziv. The answer is yes.

A higher valuation would increase Remgro’s Intrinsic Net Asset Value (INAV), which could drive up the share price.

Another benefit is that executives’ incentives and long-term bonuses are often tied to corporate performance targets.

When growth in INAV per share or Internal Rate of Return (IRR) is a core performance hurdle, a higher asset valuation directly translates into hitting those targets.

It also strengthens Remgro’s balance sheet, which can enhance its borrowing capacity and the interest rates it secures.

In Remgro’s case, the biggest benefit was to negotiate a higher price for the 30% stake which Vodacom bought last year.

On 1 December 2025, Vodacom paid R12.642 billion, which included R4.6 billion in fibre assets and R8.1 billion in cash, for the 30% stake in Maziv.

Vodacom said that the goodwill arising on acquisition was R6.282 billion, and that its share of Maziv’s net identifiable assets was only R6.36 billion.

This gives the first hint that Maziv carried a high valuation and that Vodacom paid a hefty premium for its stake in the fibre company.

Vodacom CEO Shameel Joosub defended the transaction value, explaining that it was not a standard corporate acquisition.

Instead, he said that it was a crucial, large-scale infrastructure investment aimed at bridging South Africa’s digital divide.

Maziv’s valuation method

An important question in an investigation into Maziv’s valuation is the method Remgro used to obtain it.

Remgro relies primarily on a Discounted Cash Flow (DCF) methodology based on financial forecasts for Maziv’s underlying operational assets.

The DCF model is the gold standard for intrinsic valuation. However, it is heavily reliant on forward-looking assumptions.

This makes this model incredibly malleable. In the corporate world, this flexibility is frequently exploited to create inflated valuations.

There is no reason to believe that Remgro purposefully used higher-than-expected forward-looking assumptions to inflate Maziv’s valuation.

However, to establish whether Maziv’s valuation aligns with other companies in its industry, other traditional multiples are useful.

Telkom, which owns Openserve, is the best like-for-like comparison to Maziv due to its extensive fibre operations.

Although Remgro does not provide sufficient financial data for a thorough comparison, it is still possible to compare the companies side-by-side.

Newsday used Remgro’s Interim Results for the six months ended 31 December 2025. We then doubled the numbers to arrive at an annual estimate.

The raw finances show that Telkom dominates Maziv on revenue and Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA).

Maziv passed more homes and has more paying fibre customers. However, it has a lower connectivity rate and has a smaller fibre network.

Telkom has many other assets, which Maziv does not have, including an extensive mobile network with 26 million customers.

It also owns BCX, one of South Africa’s largest information and communications technology (ICT) solutions providers in the business and enterprise market.

Despite Telkom’s much larger asset base and stronger finances, its market cap of R31 billion is well below Maziv’s valuation of R42.5 billion.

This may point to Telkom being undervalued, Maziv being overvalued, or the market discounting Telkom because of concerns.

It may also indicate that Remgro and Vodacom believe Maziv has significant growth potential and will generate substantial cash in the future.

They see the company as a high-margin, high-growth business with a great wholesale fibre infrastructure asset.

The table below shows how Maziv and Telkom compare on core comparable financial and operational metrics.

It should be noted that, for this comparison, Maziv’s (CIVH’s) financial results for the last six months were doubled to represent annual figures.

Maziv versus Telkom

Measure	Telkom	Maziv
Revenue	R44.5 billion	R7.5  billion
EBITDA	R12.5 billion	R5.9 billion
Headline earnings	R3.5 billion	R432 million
Operating profit	R5.9 billion	R2.9 billion
Free cash flow	R3.07 billion	R826 million
Debt	R6.6 billion	R18.3 billion
Price-to-headline-earnings	8.6	98.4
Price-to-sales	0.7	5.7
Price-to-EBITDA	2.4	7.2
Net debt to EBITDA	0.5	3.7
Fibre network	180,000  km	65,000 km
Homes passed	1.54 million	2.06 million
Homes connected	817,540	905,976
Business connections	43,346	60,424
Connectivity rate	53%	44%
Mobile spectrum	184 MHz	0
Mobile sites	8,420	0
Mobile subscribers	25.7 million	0
ICT clients (BCX)	27,000	0
Valuation	R30.2 billion	R42.5 billion