South Africa’s Competition Tribunal has made a significant decision to block a proposed deal between telecoms giant Vodacom and fiber company Maziv, previously known as MAZIV. This move deals a blow to Vodacom’s plans to expand its fiber reach, especially in low-income areas, through a strategic partnership with Maziv.
Vodacom had intended to invest up to R14 billion (US$790 million) into Maziv, the fiber holding company of Vumatel and Dark Fibre Africa (DFA), which is under the ownership of Community Investment Ventures Holdings (CIVH). However, the Tribunal did not provide specific reasons for rejecting the deal, stating that detailed explanations will be given at a later date.
The Tribunal raised concerns about the consolidation of Vodacom, the country’s largest mobile operator, with one of the major fiber infrastructure players in South Africa. This merger was seen as a potential threat to competition within the market.
This decision follows the Competition Commission’s recommendation in August 2023 to reject the deal, citing a lack of significant benefits that were not already present in the market. Vodacom’s Group CEO, Shameel Joosub, expressed surprise and disappointment at the Tribunal’s ruling, emphasizing that the partnership with Maziv was aimed at expanding fiber access in low-income areas, which would have been beneficial for the country.
Joosub highlighted the positive impact of the proposed deal on public interests, including investments of at least R10 billion ($565 million) over five years, job creation, and providing high-speed internet to schools and police stations at no cost. Vodacom is now considering its options, including a possible appeal in the Competition Appeal Court.
The Tribunal’s decision comes at a crucial time when South Africa is in need of substantial investments in digital infrastructure, especially in underserved communities. While the ruling may delay transformative investments, it reflects a cautious approach to maintaining fair competition in the market.
This development underscores the importance of regulatory oversight in ensuring a level playing field for all market players, even if it means restricting certain deals that could potentially have a significant impact on the country’s digital landscape. It remains to be seen how Vodacom will navigate this setback and continue its efforts to expand its fiber footprint in South Africa.
