A proposed deal between telecoms operator Vodacom and fiber company Maziv is back on the table after South Africa's Competition Commission (CompCom) said it will no longer oppose the deal.

Vodacom intended to acquire a 30% shareholding in Maziv - with an option to increase that to 40% - and had planned to invest up to 14 billion South African rand (US$785 million) before the local competition watchdog threw cold water on its plans.

The CompCom said in a statement that it has reached an agreement with the two companies on "revised conditions that substantially remedy the competition concerns raised by the Commission in its recommendation to the Competition Tribunal," which had led to the merger being prohibited.

Vodacom welcomed the CompCom's announcement and said that it still believes the deal will enhance digital infrastructure and connectivity in South Africa.

The Competition Commission will now approach the Competition Appeal Court to explain how the expanded set of transaction conditions addresses the concerns that led to the Competition Tribunal's prohibition of the transaction in October last year.

According to Vodacom the Competition Appeal Court will consider the matter on July 22, 2025.

Vodacom Group CEO Shameel Joosub said the telco was thrilled with the Competition Commission's decision, as it aligns with the company's vision of bridging the digital divide and reaching more homes and businesses, including underserved communities.

Related:SA Tribunal explains why it blocked Vodacom-Maziv deal

"Should the transaction be approved by the Competition Appeal Court, I'm confident that it will enable us to accelerate network expansion, help address the cost to communicate and contribute meaningfully to job creation," Joosub said.

The proposed deal was first announced in November 2021 but met a number of roadblocks due to competition worries.

In August 2023, the Competition Commission recommended that the deal not be allowed and in October 2024 the Competition Tribunal followed suit, prohibiting the deal.

The Tribunal's decision then led to the Minister of South Africa's Department of Trade, Industry and Competition (DTIC) filing an appeal against the decision.

The CompCom's U-turn came after additional concessions were offered by Vodacom and Community Investment Ventures Holdings (CIVH) - the current owner of the fiber assets that form part of Maziv, including Vumatel and Dark Fibre Africa.  

The CompCom said that there were three primary competition concerns that were not adequately addressed by the proposed conditions at the time of concluding the Tribunal hearings.

Related:SA Competition Tribunal prohibits Vodacom-Maziv deal

The first was horizontal reduction in competition between fixed wireless access (FWA) and fiber-to-the-home (FTTH).

The condition positioned to address this concern was that Vodacom would offer FWA where it rolled out 5G and that it would price it "competitively".

However, at the time the Commission felt the commitments on the rollout of 5G sites and FTTH were insufficient to incentivize the parties to encourage consumer access at competitive prices and ensure third party access to FTTH.

"The revised conditions address these shortcomings by improving the capex [capital expenditure] commitment by Maziv and extending it to a five-year period post-merger to ensure that Maziv remains incentivized to service third party network operators," the CompCom said.

The revised conditions also promote competition between FTTH and FWA through enhanced coverage commitments coupled with connection commitments.

The competition watchdog said the parties will need to price competitively if they are to achieve the connection commitments.

The merger parties also agreed to maintain lower-cost broadband packages to ensure that especially lower-income consumers have a range of competitively priced packages to choose from.

Related:Maziv nabs Phila Dube from rival Openserve

The second concern was the horizontal overlap in FTTH infrastructure and potential price increases post-merger.

The Commission believed that previous conditions were inadequate as they included a "weak" divestiture condition that did not adequately incentivize the merging parties to divest the overlapping infrastructure.

"The revised conditions put in place a standard divestiture arrangement whereby the failure to sell the assets within a particular period result in a trustee divestiture process to ensure the assets are divested and pre-merger competition is restored," the CompCom explained.

The third issue had to do with vertical foreclosure concerns.

"Although there were fairly comprehensive conditions in place to address foreclosure, there were notable challenges with monitoring and enforcing the conditions with the resulting concern that action would not be sufficiently timely to prevent foreclosure from occurring and harming competition," the Commission said.

The revised conditions introduce some changes to Maziv's governance structure that limit the merged entity's incentives to foreclose competitors.

Vodacom and Maziv also agreed to significantly improve public interest commitments including additional capex spend to roll-out new fiber-to-the-business (FTTB), FTTH and fiber-to-the-site (FTTS) infrastructure.

The companies agreed to provide free access to 1Gbit/s fiber lines for public libraries and clinics passed by FTTH infrastructure and increased the number of police stations that Vodacom will provide with FWA products.

There was also an additional commitment to enterprise development and an increase in the employee share ownership plan previously agreed upon.

"Access to reliable, high-speed internet is the cornerstone of a dynamic economy and a democratic society. The Commission is confident that the revised conditions agreed with the merger parties will ensure that South Africa will benefit from the continued competitive prices and product choices in this critical sector," said Commissioner Doris Tshepe.

The matter will now proceed to the Competition Appeal Court on an unopposed basis and the Commission said it will inform the court how the enhanced conditions address the concerns it previously raised.