The Competitors Tribunal dominated towards Vodacom’s proposed acquisition of Maziv as a result of the merger would completely hurt competitors in SA’s telecom sector and negatively have an effect on hundreds of thousands of shoppers who depend on inexpensive web companies.
The explanations for the choice, introduced on Friday after an in depth evaluation spanning practically two years, follows issues raised by the Competitors Fee and varied business stakeholders. The tribunal mentioned the merger’s anticompetitive results would outweigh any potential public curiosity advantages.
The tribunal initially rejected the transaction in October 2024.
The tribunal concluded that Vodacom’s proposed acquisition of a 30%-40% stake in Maziv, the guardian firm of fibre giants Darkish Fibre Africa and Vumatel, would create a dominant entity able to stifling competitors throughout a number of markets.
These markets embrace fibre-to-the-home, fibre-to-the-business and cell backhaul companies.
In line with the tribunal, the mixed entity may prohibit rivals’ entry to crucial fibre infrastructure, disadvantaging smaller web service suppliers and cell community operators. It warned that decreased competitors may result in greater information prices and slower innovation, finally harming hundreds of thousands of SA shoppers.
Vodacom had dedicated to investing R14bn in SA’s digital infrastructure, together with rolling out fibre to 1-million properties in low-income areas and creating 10,000 jobs. Nevertheless, the tribunal discovered these commitments weren’t merger-specific and are more likely to happen whatever the transaction attributable to current market dynamics and regulatory obligations.
The tribunal mentioned the general public curiosity advantages claimed by the merger events had been considerably decrease than marketed and didn’t justify the anticompetitive dangers posed by the deal.
The merger has been a contentious concern, with commerce, business & competitors minister Parks Tau publicly supporting the deal on public curiosity grounds. Tau argued that the transaction would enhance funding in fibre and cell connectivity, aligning with SA’s priorities for industrialisation and job creation.
Nevertheless, his stance had divided political events, with some arguing that the merger would undermine competitors and hurt shoppers.
To deal with competitors issues, Vodacom had supplied treatments similar to divesting sure fibre-to-the-home property and implementing behavioural circumstances to forestall anticompetitive practices. Nevertheless, the tribunal deemed these measures insufficient, citing their complexity and lack of enforceability. The watchdog additionally mentioned the proposed treatments failed to deal with the everlasting lack of future competitors and the structural modifications to the market that the merger would deliver.
In November, Vodacom CEO Shameel Joosub mentioned the corporate was dedicated to the Maziv deal, stating that it was important for accelerating SA’s digital transformation. Joosub mentioned Vodacom had no different plans to increase its fibre community on the identical scale with out the merger.
He argued that the deal was essential for addressing the digital divide in underserved areas and that the tribunal’s choice would delay these efforts.
Vodacom and Remgro will head to court docket in July in a last bid to realize approval for the proposed merger. The Competitors Enchantment Court docket knowledgeable the events on March 6 that their enchantment can be heard on July 22-24.
With Mudiwa Gavaza
tsobol@businesslive.co.za
