Vodacom and Remgro’s fibre business have formally lodged a notice that they will appeal the Competition Tribunal’s blocking of their merger once the authority reveals its reasons for doing so.
At end-October, the Competition Tribunal announced its decision to block the merger of Vodacom and Maziv’s fibre business, a move that sent shockwaves through SA’s telecom industry.
The proposed merger would have seen Vodacom take a 30% stake in Maziv, which houses Remgro’s fibre units Vumatel and Dark Fibre Africa — together worth an estimated R13bn — with the option of increasing the stake to 40%.
The tribunal’s detailed reasons for prohibiting the transaction are yet to be published.
On Tuesday, Vodacom and Remgro told their shareholders they had decided to lodge a notice of appeal with the Competition Appeal Court “that will be supplemented upon receipt of the Competition Tribunal’s reasons for the prohibition”.
Earlier this month Vodacom CEO Shameel Joosub said the tribunal’s decision was a travesty, with the group vowing it would not walk away from the deal until it has explored all options.
This comes while the telecom industry is moving towards more co-investment, or at least the pooling of resources, regarding fibre investment requirements.
As with the R10bn spent annually by Vodacom and rival MTN in recent years to cover 99% of the country with their mobile networks, a similar effort is needed in fibre, coming at huge cost. As such, operators are finding ways to pool their resources and share the risk.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.