The one Afrihost founder who left the company

Afrihost cofounder Peter Meintjes is part of a group of investors bringing South African ingenuity to America’s fibre market.

Meintjes cut his teeth in South Africa’s highly competitive hosting and Internet service provider markets as Afrihost’s chief operating officer for nearly 16 years.

Now, he is bringing that experience to bear at Ripple Fiber, a network operator launched in North Carolina with ambitions to provide affordable, high-speed fibre services across the United States.

Afrihost was launched in 1999 by three school friends — Meintjes, Gian Visser and Brendan Armstrong.

Before entering the broadband market, it made a name for itself in South Africa’s web hosting space.

In the late nineties, hosting a website was prohibitively expensive. Companies like Mweb and Internet Solutions (now NTT Data) charged R550 per month for a basic hosting package.

This inspired the three friends to offer much cheaper web hosting services. They launched a domain and web hosting package for only R150 per month.

Offering a competing service at a heavily discounted rate helped popularise web hosting in South Africa — a strategy they would use to great effect many years later to enter the broadband market.

Afrihost stepped into South Africa’s hyper-competitive DSL service provider market in 2009.

A healthy wholesale market had already established itself, and prices were relatively fixed between R60 and R70 per gigabyte.

Afrihost’s first product offered DSL data at R55 per gigabyte.

While cheaper than most players in the space, it wasn’t enough to attract many signups.

At an informal strategy meeting, the team decided to use their advertising budget to subsidise the product and re-enter the market at R29 per GB.

They signed up thousands of customers within weeks and quickly became one of the largest ADSL service providers in South Africa.

The next four years were a period of immense success and growth for Afrihost.

This success caught the attention of big telecommunication players, among them MTN.

At the time, MTN did not have a strong presence in the residential and small business ISP market, and Afrihost could fill this gap.

Afrihost was also a wholesale customer of MTN’s, so a deal made perfect sense for both parties.

In 2014, MTN bought 50% plus one share of the company for R408 million.

This was the beginning of a tumultuous two years for Afrihost.

While the deal made instant millionaires of the Afrihost directors, it came at a tremendous cost.

Afrihost’s management suddenly had to deal with laborious corporate processes, and all big decisions had to be approved by a board.

The once agile and innovative company was a thing of the past. Afrihost’s product development ground to a halt.

After two years of slow product development and declining service levels, Afrihost’s directors made the call to buy back MTN’s stake in the company.

MTN agreed, and in 2016, Afrihost’s directors bought back their company for R325 million.

The transaction brought in new shareholders and saw Meintjes leave the company to pursue other interests in the US.

A few years later, Meintjes got together with some other industry contacts from back home to tackle an opportunity they noticed — US fibre networks are far behind South Africa.

Myriad Capital is spearheading the push. Its founder and CEO, Greg Wilson, is personally invested along with Dimitri Moussa, former Conduct Telecommunications shareholder and DFA sales head.

There are numerous other shareholders, too — all of them from South Africa.

Myriad believes there is a gap in the US market partly because households and businesses weren’t in a rush for better technology because their existing cable broadband still offered good speeds.

Some old copper-based coaxial cable networks even support up to gigabit-per-second speeds, albeit with much slower (20Mbps) upload speeds than fibre can offer.

The US also doesn’t struggle with copper cable theft like South Africa.

Another factor, Myriad said, was that the institutional knowledge about how to roll out an infrastructure project at scale no longer exists at the major cable companies.

To execute its strategy, Myriad invested in two businesses rolling out fibre in the US, including the North Carolina-based company Open Fiber.

Open Fiber has since been renamed Ripple Fiber, with Meintjes serving as Chief Experience Officer and Wilson as CEO.

Ripple Fiber has been aggressively rolling out across North Carolina, with at least four new areas launching in the past three weeks, adding over 73,000 homes passed to the company’s network.

Myriad previously told MyBroadband that because copper continues to perform well in the US, theirs is not a technology play.

Their value proposition is the customer experience and how well they run their construction projects.

The US’s incumbent broadband providers are infamous for poor customer service, creating a gap for companies who can build a reputation for treating their customers well.

“We have to rely more on the overall service experience, focusing on four fundamentals: pricing, honesty with our consumers, uptime, and quality of the Wi-Fi,” Myriad said.

“For example, you’ll see the sticker price saying $50 for an unlimited service — and then you look at the fine print, and there’s another $10 billing charge, and another $10 mandatory router charge,” it added.

“The $50 service is actually $70 — and capped at 100GB.”