South Africa stands at a critical juncture, where the promise of a thriving digital economy capable of creating jobs and bridging societal divides hangs in the balance.
The Competition Tribunal’s decision to prohibit the Vodacom-Maziv merger is more than just a legal ruling — it is a missed opportunity for South Africa’s digital transformation and economic growth. The proposed merger included commitments to:
- invest at least R10bn over a five-year period, predominantly in low-income areas, with the aim of assisting at least a million new homes with fibre infrastructure;
- create up to 10,000 new jobs; and
- establish a R300m enterprise and supplier development (ESD) fund that prioritises SMME development.
This is not just a setback for these companies, but a significant blow to the millions of South Africans who are unemployed, the SMME community and the broader ICT sector’s aspirations to drive meaningful change.
At a time when global digital trends demand more integrated and scalable infrastructure this prohibition sets back the sector’s ability to respond effectively to the evolving needs of consumers, businesses and the broader economy. Considering the department of trade, industry, and competition’s own acknowledgment of the deal's “substantial positive public interest effects”, the decision requires serious reconsideration.
Originally pitched in 2021, the Vodacom and Maziv merger was only approved by the Independent Communications Authority of South Africa (Icasa) some time in November 2022, a review process that spanned more than a year, before the tribunal ultimately blocked it in October 2024.
The tribunal held the view that the merger could potentially lead to higher prices, reduced consumer choice and long-term risks versus short-term benefits. Ultimately it concluded that the merger-specific public interest benefits were temporary and insufficient to counterbalance permanent anticompetitive effects.
This tension between competition policy and public interest outcomes speaks directly to the issue of regulatory clarity. Stakeholders need to thoroughly consider the broader socioeconomic impacts, including employment and transformation, alongside concerns about market dominance and consumer choice. Two things can be true at once, and the concern remains that anticompetitive considerations could cloud the true potential of these mergers to drive positive change, especially when public interest is at stake.
The concern that the tribunal may be over-regulating rather than simply adjudicating stems from its practice of attaching significant conditions to merger approvals and anticompetitive conduct, which some see as policy interventions. This raises the question of whether such actions fall within the tribunal's statutory duties or if they infringe upon roles traditionally played by the Competition Commission or sector-specific regulators.
To maintain South Africa's competitiveness on the global stage, it is imperative that regulatory bodies and their quasi-judicial bodies adapt to the fast-paced nature of technological advancement
The lengthy deliberation process by the Competition Tribunal poses a significant risk to mergers in South Africa’s ICT sector. In the Vodacom-Maziv case, for example, the decision took nearly three years before being rejected, during which time market conditions evolved, capital deployment was delayed, and strategic momentum was lost.
Such delays highlight the urgent need for greater regulatory efficiency and predictability, ensuring that merger reviews do not inadvertently stifle the very investment, innovation and transformation they are meant to support.
To maintain South Africa's competitiveness on the global stage, it is imperative that regulatory bodies and their quasi-judicial bodies adapt to the fast-paced nature of technological advancement.
At a time when government has explicitly called for increased infrastructure investment — most notably in the state of the nation address and budget vote speeches — the industry finds itself constrained by regulatory decisions that fail to align with these priorities. South Africa’s ICT sector is a critical enabler of economic growth, and policy misalignment of this nature risks not only stalling transformation but also slowing down the broader digital economy’s expansion.
In a rapidly evolving digital economy, authorities cannot operate in isolation. Achieving regulatory harmony also necessitates collaboration with sector-specific regulators such as Icasa, which possesses specialised expertise in the ICT sector. This co-ordinated approach is essential to foster an environment that promotes investment, innovation and growth, ensuring that regulatory decisions align with broader economic objectives.
As the Association of Comms and Technology (ACT), we have consistently championed initiatives that foster a vibrant, competitive, and inclusive ICT ecosystem. Our members recognise the urgent need to address market consolidation while ensuring that empowerment remains a central tenet of industry growth. The Vodacom-Maziv transaction presented a unique opportunity to proactively address these challenges, and this prohibition feels like a step backwards, hindering our collective ability to build a future-proof digital landscape.
ACT and its members recognise the government’s call for infrastructure investment, but achieving meaningful progress requires a willingness to explore innovative avenues, including strategic mergers that can unlock synergies, drive efficiency, ensure transformation and attract further investment. The tribunal's decision, unfortunately, sends a chilling message to potential investors as well as budding SMMEs and casts a shadow of uncertainty over South Africa's digital future.
We urge the DTIC and the Competition Tribunal to:
- Re-evaluate the long-term implications by conducting a thorough review of the decision's impact on SMME development, infrastructure investment and South Africa's overall competitiveness in the digital economy.
- Foster a collaborative environment by engaging in open and constructive dialogue with industry stakeholders to identify alternative pathways for achieving the shared goals of transformation, competition and inclusive growth.
- Prioritise regulatory clarity by providing clear, timeous and consistent guidelines for mergers and acquisitions in the ICT sector, ensuring that decisions are made in a timely manner and based on a comprehensive understanding of the industry's dynamics.
The time for navel-gazing is over. South Africa needs a bold, forward-looking approach to ICT development, one that embraces strategic partnerships, empowers SMMEs, and unlocks the transformative potential of a connected nation. As ACT, we stand ready to work with all stakeholders to build a digital future that leaves no-one behind.
• Batyi is CEO of the Association of Comms & Technology
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.