South Africa’s Competition Commission (CompCom) has recommended that Vodacom’s acquisition of a stake in fibre operator MAZIV be blocked.
The acquisition would have brought Vumatel, the country’s fibre-to-the-home (FTTH) network operator, and Dark Fibre Africa (DFA), which provides fibre services in the country’s cities, into Vodacom’s orbit.
Community Investment Ventures Holdings (CIVH) owns Vumatel and DFA, which merged and rebranded as MAZIV in September 2022. The competition watchdog said it has found no major benefits from the proposed transaction that were not already in existence.
In a statement, the CompCom said the telco’s acquisition, valued at $696 million, “is likely to substantially prevent or lessen competition in several markets and that the conditions offered do not fully address the resultant harm to competition. Further, the public interest commitments provided by the merger parties do not outweigh the competition concerns and raises several vertical and horizontal competition concerns.”
CompCom felt that the proposed merger would result in the loss of direct competition between Vodacom and MAZIV in the areas where both have deployed fibre, offering an incentive for self-preferencing and discriminatory behaviour. That judgement also seems to imply that price competition would suffer and there might thus be less benefit to underserved low-income and rural consumers, especially in relation to 5G fixed wireless access (FWA).
Vodacom has said it will fight the CompCom’s block of its acquisition of MAZIV.
“Though we are disappointed, it is important to note that the Competition Commission’s recommendation is not the end of the process. Instead, the next step is for the proposed transaction to be presented to the Competition Tribunal,” said Vodacom in a statement. “This would have been the case even if the Competition Commission were to have recommended the proposed transaction for the Competition Tribunals approval.”
