South Africa’s telecommunications landscape was rocked on Tuesday as the Competition Tribunal blocked Vodacom’s proposed acquisition of a co-controlling stake in Maziv, the parent company of Vumatel.
This decision delivers a major setback to Maziv and puts the brakes on anticipated industry consolidation.
The Tribunal’s move could also derail potential mergers, like the anticipated deal between MTN South Africa and Telkom’s Openserve, signaling a cautious stance on market concentration in the sector.
The Competition Tribunal has blocked Vodacom’s planned investment of up to R14 billion into Maziv, the holding company for Vumatel and Dark Fibre Africa. This deal was intended to expand Maziv’s fibre network in low-income areas, which Vodacom says would have greatly benefited South Africa.
During the Tribunal hearings, the Department of Trade, Industry, and Competition (DTIC) highlighted the transaction’s “substantial positive public interest effects,” with Vodacom and Maziv committing to:
- Invest at least R10 billion over five years, mainly in low-income areas.
- Connect at least one million new homes in these areas.
- Create up to 10,000 new jobs.
- Establish a R300 million fund to support small and medium enterprises.
- Offer free high-speed internet to over 600 nearby schools and police stations.
- Bring up to R14 billion in investment to South Africa.
Shameel Joosub, Vodacom Group CEO, expressed his disappointment, saying, “I am deeply surprised and disappointed by the Tribunal’s decision. South Africa desperately needs additional significant investment, especially in digital infrastructure in lower-income areas. Our investment of up to R14 billion would have changed millions of lives and created thousands of jobs.”
Vodacom is awaiting the Tribunal’s detailed reasoning for its decision and may consider appealing through the Competition Appeal Court.
In a statement, Maziv acknowledged the recent decision by the Competition Tribunal prohibiting the proposed merger between MAZIV and Vodacom.
“The company is disappointed by the outcome but respects the Tribunal’s process,” reads the statement.
“We will await the reasons for the prohibition in order to consider our options and remain committed to driving innovation and economic growth through the power of connectivity.”
