Vodacom and Vumatel — It’s not over
Vodacom and Vumatel-owner Maziv have said they will forge ahead and make their case before the Competition Tribunal to allow the two companies to merge their fibre networks.
This comes after the Competition Commission issued a statement on Tuesday recommending that the deal be prohibited.
“While we are disappointed, it is important to note that the Commission’s recommendation is not the end of the process,” Maziv stated.
“The parties will now approach the Competition Tribunal to present evidence and argue for approval of the merger.”
Maziv said it firmly believes the transaction will deliver substantial benefits to South African consumers and the economy.
“Vodacom’s planned investment in excess of R10 billion holds particular significance as a considerable proportion will be focussed on developing new fibre infrastructure at a time when attracting capital investment is particularly challenging,” Maziv said.
“The transaction will be hugely beneficial to the market in that Vodacom fibre assets will, as a result of the transaction, become commercially available on an open access, transparent and non-discriminatory basis.”
In addition, Maziv said the investment would allow it to extend fibre infrastructure to an estimated 1 million new households in lower-income areas, create up to 10,000 new jobs, and commit at least R10 billion to capital expenditure.
“[The investment] would also facilitate the creation of small to medium enterprises through a fund formed specifically for this purpose with R300 million of committed capital,” it said.
Maziv said it believes all of the Competition Commission’s concerns could be addressed by the conditions and commitments they proposed with Vodacom.
“While we have not had the opportunity to study the Commission’s reasons in detail, we are confident that the massive positive impact of the proposed transaction on critical issues like the democratisation of the internet in lower-income areas, as well as growth of the economy will be favourably considered by the Competition Tribunal,” it said.
Vodacom also responded to the Competition Commission’s recommendation, saying the transaction sought to accelerate South Africa’s fibre reach, network quality, and resilience.
It also hopes to foster economic development and help to bridge South Africa’s digital divide in some of the most vulnerable parts of society.
“Having engaged extensively with the Competition Commission’s investigative team since the proposed transaction was announced, Vodacom is surprised and disappointed with the Competition Commission’s recommendation given that both Vodacom and CIVH have endeavoured to thoroughly address competition-related concerns through a list of remedies and public interest commitments put forward to the Competition Commission,” Vodacom said.
Like Maziv, Vodacom noted that the next step is to present the proposed deal to the Competition Tribunal.
“This would have been the case even if the Competition Commission were to have recommended the proposed transaction for the Competition Tribunals approval,” Vodacom explained.
“Looking forward to the process with the Competition Tribunal, Vodacom intends to showcase the strong public interest and pro-competitive advantages that the proposed transaction would have on the fibre market, and the country as a whole.”
Vodacom said that it would propel South Africa’s social development and be highly beneficial for the country, the economy, and lower-income households on several fronts, including:
- Maziv’s R10 billion investment over five years, including its commitment to pass at least one million new homes in lower-income areas such as Alexandra.
- Vodacom’s investment of over R13 billion, which it said could not be made by Maziv alone and is in addition to Vodacom’s pledge at the recent SA Investment Conference to invest R60 billion over five years.
“We firmly believe that the transaction will deliver substantial benefits to both the South African consumer and the economy,” Vodacom stated.
“Vodacom’s planned investment holds particular significance as a considerable proportion will be focussed on developing new fibre infrastructure at a time when attracting capital investment is particularly challenging.”
Pictured: Vodacom CEO Shameel Joosub (left), Maziv CEO Dietlof Mare (right)
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