Tribunal blocks Vodacom merger with Maziv - 'communities without fibre will pay the price'
The Competition Tribunal found that the effects of the proposed merger would be anti-competitive.
Internet connection. Pexels/cottonbro studio
Stephen Grootes interviews Duncan McLeod, founder and editor of TechCentral.
The Competition Tribunal has announced it's blocking a proposed deal that would see Vodacom merge with fibre group Maziv, the parent company of Vumatel.
Vodacom’s acquisition of a co-controlling stake in Maziv, would have seen significant investment in digital infrastructure in South Africa, particularly in under-served communities.
The decision by the Tribunal is not only a devastating blow for Maziv and its shareholders, but for the development of the telecoms industry says TechCentral editor Duncan McLeod.
He argues that the Tribunal is guilty of damaging regulatory overreach in blocking the deal.
"South Africa’s competition authorities are actively doing damage to South Africa’s economic prospects. They need to be reined in."
Duncan McLeod, Editor - TechCentral
In conversation with Stephen Grootes, McLeod points out that the plan was to plough the estimated R10 billion from this proposed deal to roll out fibre across our townships and other areas which are not well served at the moment.
As a result of the Tribunal's decision, he says spending will not take place and as a result, those communities are not going to get the Internet connectivity they might have got much sooner otherwise.
McLeod notes that there are other fibre players in the local market, including big ones like Telkom's Openserve.
In fact, he says, the Vocacom-Maziv deal would have helped boost further consolidation in the fibre market.
"It's likely MTN would have taken a similar sort of stake in the Openserve business and I think we would have seen a bit of a price war and real competition in infrastructure rollout between these big two players in the telecommunications industry.
"As a direct result of this decision, we're not going to see that rollout, and fibre infrastructure deployments across South Africa are going to slow down considerably."
Duncan McLeod, Editor - TechCentral
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