The Competition Tribunal has accepted MTN and data provider Rain’s requests to intervene in the hearings on whether to approve the merger between Vodacom and fibre providers Vumatel and Dark Fibre Africa.
Johann Rupert’s investment holding company Remgro owns Community Investment Ventures Holdings, (CIVH), which owns Vumatel and Dark Fibre Africa.
Vodacom, SA’s biggest mobile operator hopes to combine its business with the CIVH units, which make up SA’s largest fibre infrastructure operator. This is to share costs and the expertise of laying and servicing fibre. This would also increase the rollout of fibre and access to data in underserved areas, the merging parties say.
Dark Fibre Africa and Vumatel have had been folded into a new holding company, Maziv.
Vodacom aims to take a 30% stake in Maziv, worth an estimated R13bn, with the option of raising that to 40%. The transaction, announced in November 2021, has already received approval from SA’s telecom regulator Icasa. But the deal needs the go-ahead from the tribunal, which acts like a court on competition matters. It will hear Vodacom and Maziv’s request to merge in May 2024.
In October, MTN and Rain applied to join the tribunal hearings and explain the effects of the deal on them. MTN and Rain are competitors and customers of the merging parties, with Rain also being a supplier.
On Friday, the tribunal agreed to let them intervene and specified the areas where they can give evidence, including saying whether the deal should be approved.
Earlier this year the Competition Commission recommended the deal be prohibited, saying it will combine the largest fibre infrastructure player with the largest mobile operator and this raises both competition and public interest concerns.
The public interest concerns refer to the level of black ownership in a firm and the development of small and medium businesses, and the commission’s reticence suggests it feels there is not enough ownership in the proposed new firm by historically disadvantaged people.
Both MTN and Rain, which is owned by South African billionaire Patrice Motsepe, participated in the commission’s investigation of the proposed merger and raised concerns at the time.
At the tribunal, both MTN and Rain are permitted to give evidence on the merger’s effect on competition in the data and mobile phone sector and whether it would increase or lessen competition.
Both can also give evidence on conditions they believe the tribunal should impose should it approve the merger.
Rain can give evidence on the effects of the deal on its ability to sell data and mobile services to consumers. It can also say whether the merger would affect the availability of fibre and mobile infrastructure to businesses such as itself.
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