Following a decision by the competition commission to halt Vodacom’s intended acquisition of Maziv, the company has issued a response, rebutting the competition concerns outlined by the regulator.
South African mobile network operator Vodacom has responded to a decision last week by the country’s competition regulator to halt its acquisition of Maziv, a holding company whose assets include fiber network operators Dark Fibre Africa (DFA) and Vumatel. “The Commission is of the view that the proposed transaction is likely to substantially prevent or lessen competition in several markets and that the conditions offered do not fully address the resultant harm to competition,” the regulator said.
Additionally, the commission stated that the public interest commitments provided by the merger parties did not outweigh the competition concerns. In its response seen by TechCabal, Vodacom said it is disappointed in the regulator’s decision but intends to pursue other avenues to make its case.
“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,” said Vodacom Group spokesperson, Byron Kennedy.
Furthermore, the company intends to showcase the strong public interest and pro-competitive advantages the proposed transaction would have on the fibre market and the country. Contrary to the commission’s conclusion, Vodacom believes the proposed transaction will help bridge the digital divide and enhance competition in the fibre market as the parties have committed to ensuring access to Maziv’s fibre assets.
Vodacom’s commitment to ensuring that the deal bridges the digital divide in the country and fosters competition includes initiatives such as a commitment to create up to 10,000 new jobs and SMME development by establishing a new enterprise and supplier development fund to the tune of R300 million over three years. Maziv has also committed to passing at least one million new homes in lower-income areas with fibre infrastructure over five years.
Furthermore, the company states that the investment, which is more than R13 billion, would come when attracting capital investment into South Africa is particularly challenging.
Following the suggestion by the commission, the case will now move to the competition tribunal, which adjudicates on matters referred to by the commission. Should the tribunal uphold the recommendation by the commission not to greenlight the transaction, Vodacom has the option of going to the Competition Appeal Court, which considers appeals or reviews against tribunal decisions.