04 November 2024
South Africa’s Competition Tribunal has announced its decision to block Vodacom’s acquisition of a 30% stake in fibre optic infrastructure group Maziv. Valued at approximately R14 billion, the transaction would have given the mobile operator access to a vast fibre optic network and facilitated the expansion of its network coverage.
The Competition Commission had already recommended in August 2023 that the transaction be blocked, arguing that it was likely to prevent or reduce competition in several markets. It also added that the conditions proposed by the parties to the merger did not fully remedy the harm to competition that would result.
If successful, Vodacom and Maziv’s parent company CIVH have committed to investing at least R10 billion over five years; connecting at least one million new homes in low-income areas over five years; creating up to 10,000 new jobs; establishing a R300 million Enterprise and Supplier Development Fund to prioritise SME development; and providing free high-speed internet to more than 600 schools and nearby police stations.
Vodacom said that it would wait to hear the Tribunal’s reasons before considering all its options, which could include an appeal to the Competition Court of Appeal.
“I am deeply surprised and disappointed by the Tribunal’s decision. South Africa desperately needs significant additional investment, particularly in digital infrastructure in low-income areas,” said Vodacom Group CEO Shameel Joosub.
In 2022, the Internet Service Providers Association (ISPA) expressed its reluctance to accept the merger of the world’s largest mobile operator and ‘the largest national fibre-to-the-home and long-haul fibre company.’ The organisation believed that the transaction would lead to a reduction in competition in the national telecoms market. It also feared that the merger would reinforce Vodacom’s ‘culture of closed access,’ limiting open access to critical infrastructure for competitors.
Rain and Telkom have opposed the transaction, but MTN believes that investment in South Africa’s fibre network infrastructure is positive and sees consolidation in the fibre segment as inevitable and desirable. Charles Molapisi, CEO of MTN South Africa, said the company does not oppose the merger or support blocking the proposed Vodacom-Maziv merger.
