The EFF has added its voice to the growing number of political players weighing in on the Competition Tribunal’s decision to block Vodacom and Remgro’s fibre merger, denouncing minister Parks Tau’s apparent support of the deal.
“The EFF strongly condemns minister of trade, industry & competition [DTIC] Parks Tau for interfering in the Competition Tribunal’s decision to block the Vodacom and Remgro’s Maziv fibre merger through an appeal,” the party said in a statement on Tuesday.
At the end of October, the tribunal announced its decision to block the merger in a move that sent shock waves through SA’s telecom industry.
The proposed deal would result in Vodacom taking 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%.
In a show of support for the transaction, last week the DTIC filed notice that it will appeal against the tribunal’s decision, once the authority discloses its reasons for doing so.
This added to both Vodacom and Remgro filing their own notices a day earlier.
“This interference is a clear attempt to protect the [Johann] Rupert family, the interests of the white capitalist elites, and entrench the duopoly of Vodacom and MTN in S A’s telecommunications industry,” said the EFF.
Meanwhile, the DA said it welcomed Tau’s move to appeal the tribunal’s ruling.
“This unprecedented move by the minister offers an important opportunity not only to revisit this specific case but also to promote meaningful reform of SA’s competition policy more broadly,” said the DA.
While the deadline for an appeal has now passed, the tribunal’s detailed reasons for prohibiting the transaction are yet to be published.
Tau’s participation in the merger proceeding was based “on public interest grounds, which led to substantial public interest commitments that would have significantly boosted investment, created jobs and resulted in growth of fibre and mobile connectivity in communities that lack adequate communication infrastructure”.
In November 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 had 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, which will come at huge cost. As such, operators are finding ways to pool their resources and share the risk.
If approved, the Vodacom-Maziv merger would make fibre more readily available and has the potential to create thousands of jobs, which would aid economic growth.
“We also condemn the media’s co-ordinated attacks on the commissioner of the Competition Commission, aimed at undermining their credibility and threatening the very foundation of SA’s democracy,” said the EFF.
“To ensure accountability, the EFF will demand that the portfolio committee on trade, industry, and competition holds a hearing to review this matter.”
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