South Africa’s Competition Tribunal has blocked Vodacom’s attempt to buy a majority stake in Maziv, a subsidiary of Community Investment Ventures Holdings (CIVH).
Under the deal, Vodacom will take a 30% to 40% stake in Egypt, combining its assets with CIVH’s Dark Fiber Africa (DFA) and Vumtel, the country’s two largest fibre optic network owners.
The decision came after a nearly two-year administrative review, which included a 26-day hearing that ended in September 2024.
Vodacom said the decision was surprising and disappointing. Both the telco and Maziv said they were awaiting detailed reasons for the tribunal’s decision and would consider an appeal by the Competition Tribunal to explore other possible avenues.
The matter was referred to the Supreme Court after the Competition Authority ruled that the exchange should be banned due to the risk of competing in the communications sector. This comes after the Independent Communications Authority of South Africa (ICASA) approved the merger in November 2022.
Vodacom believes the merger will help close South Africa’s digital divide by expanding fibre connectivity to underserved communities.
As part of the deal, Vodacom committed to investing more than R10 billion ($565.5 million) in fibre infrastructure over five years, mostly in low-income areas.
The investment is aimed at bringing fibre connectivity to more than a million new homes, particularly in under-resourced areas. The largest telecoms company plans to create up to 10,000 jobs, allocate 300 million rand ($17 million) for small business development and provide free high-speed internet to more than 600 schools and children in close proximity to the police.
But the deal could challenge Vodacom’s position as South Africa’s largest telecoms operator and its significant operations in the fibre optic industry, squeezing competition, the court heard.
The decision came after detailed testimony from several rivals, including MTN, Telkom and Rain, as well as the Department of Trade, Industry and Competition (DTIC).
Rivals have expressed concerns that the merger would harm smaller ISPs and make it harder for them to compete fairly in the market.
business experts representing a Competition Committee also sadly supported the court’s decision by providing their views on the potential impact of the integration of the business sector.
The decision will have significant implications for South Africa’s fibre expansion plans. Remgro, which owns 57% of CIVH, said that without Vodacom’s financial support, Vumtel’s aim to expand its fibre equipment in South African cities could face a long delay.
