Vodacom doubts fibre deal amid South Africa’s competitive issues


The largest fiber acquisition in the country is at risk after a request to suspend the transaction was submitted to the Competition Tribunal of South Africa, which may also delay Vodacom Group Ltd.’s intentions to acquire a stake in Remgro Ltd.’s fiber companies.

In a statement released on Tuesday, the Competition Commission expressed worries that the 13.2 billion rand ($696 million) acquisition by Johannesburg-based Vodacom could seriously impede competition in several markets. This action was taken following a 21-month wait for CompCom approval, which ultimately resulted in the anti-trust authorities rejecting the merger.

Under CEO Shameel Joosub’s direction, Vodacom initially proposed in 2021 acquiring a co-controlling interest in all fiber assets held by Remgro’s affiliate, Community Investment Ventures Holdings (CIVH), a company that is traded on the Johannesburg Stock Exchange. Fiber network operators Vumatel and Dark Fibre Africa stand out among these assets because they are essential to Vodacom and CIVH’s pre-merger ambitions to expand services, particularly in underserved low-income communities. CompCom emphasizes that the goal of these expansion plans is to provide consumers who are underserved or unserviced with price competition and consumer choice.

The fiber market is highly competitive, with players like South Africa’s telecom giant Telkom also looking for valuable fiber assets. This competition has a direct impact on the acquisition’s viability. Since the beginning of the merger proposal, Vodacom and CIVH have diligently worked with CompCom’s investigative team to address concerns about competition.

Vodacom, which has expressed shock and disappointment, insists that it has worked with authorities and has provided a thorough list of remedies and public interest commitments. Both parties are adamant about maintaining open access and non-discriminatory pricing to guarantee access to Maziv’s fiber assets, which include those contributed by Vodacom.

According to Vodacom, the proposed transaction has the potential to close the digital divide and increase competition in the fiber market. Vodacom highlights the fact that the transaction would bring over R13 billion into South Africa, providing a sizeable capital injection at a time when luring investment is particularly difficult.

As the Competition Tribunal evaluates the potential risks and benefits of the transaction, Vodacom and Remgro’s aspirations to reshape the nation’s fiber landscape remain uncertain, pending regulatory decisions that could shape the trajectory of the telecommunications industry.

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Written by Tumininu adeleye

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