Trade, Industry and Competition Minister, Parks Tau, has noted the order issued by the Competition Tribunal prohibiting the proposed merger between Vodacom (Pty) Ltd and Maziv (Business Venture Investments No. 2213 (Pty) Ltd).
“This order follows the Competition Commission’s initial recommendation to prohibit the merger, citing significant concerns that it could substantially reduce competition in critical markets, particularly within the 5G Fixed Wireless Access (FWA) and fibre infrastructure sectors.
“The Ministry participated in the merger proceedings on public interest grounds in line with merger provisions of the Competition Act, which led the merger parties committing substantial public interest conditions to significantly boost investments and growth of fibre and mobile connectivity in South Africa. This in line with South Africa’s priorities for industrialisation, reindustrialisation, and investment to foster economic growth and create jobs,” said the Department of Trade, Industry and Competition (dtic).
In a statement on Tuesday, the dtic said Minister Tau awaits the forthcoming publication of detailed reasons of the Tribunal’s decision.
“Once the Tribunal’s full reasoning is available, the Ministry will assess and advise on the next steps in line with the Competition Act,” it said.
The Tribunal’s order to prohibit the proposed merger was made on Tuesday, 29 October following the Competition Commission’s initial recommendation on 08 August 2023 that the proposed merger be prohibited. The Tribunal is an independent adjudicative body set up in terms of section 26 of the Competition Act, No.89 of 1998. The Tribunal adjudicates competition matters, in accordance with the Competition Tribunal Act of 1998 and has jurisdiction throughout the county.
Findings by the Commission stated that the proposed merger would result in a substantial lessening of competition, particularly in the market for 5G Fixed Wireless Access (FWA) and fibre.
According to the Commission, both Maziv and Vodacom had significant pre-merger plans to expand coverage, particularly in underserved low-income areas.
The Commission found that the proposed merger would likely prevent or lessen this competitive rivalry and deprive low-income consumers of the benefits that fixed competition exerts on mobile products such as lower prices. In addition, the Commission found that the merger creates the ability and incentive to partially foreclose or otherwise disadvantage rival mobile network operators (MNOs), other internet service providers and fibre operators.
It further said that the merger amplified the merged entity’s incentive to preference their own retail businesses over those of competitors. The Commission found that the remedies put forward by the merger parties did not adequately address the anti-competitive effects of the merger. There were no significant benefits arising from the proposed merger that were not already independently planned prior to the merger or were not already in place.
Meanwhile, the Commission welcomed the Tribunal’s decision.
“The Competition Commission welcomes the decision by the Competition Tribunal (“Tribunal”) to prohibit the proposed merger between Vodacom (Pty) Ltd (“Vodacom”) and Business Venture Investments no 2213 Proprietary Limited (“Newco”/ “Maziv”).
“The proposed merger would have resulted in the country’s largest mobile operator, Vodacom, acquiring a controlling interest in one of South Africa’s largest fibre infrastructure players, Maziv. Vodacom also has fibre assets which would have been transferred to Maziv,” it said in a statement on Tuesday.
The Commission as one of the the three independent statutory bodies established in terms of the Competition Act to regulate competition between firms in the market, it is the investigating and prosecuting agency in the competition regime while the Tribunal is the court. – SAnews.gov.za
