The Competition Commission has reached an agreement with Vodacom and Maziv on the revised conditions that will remedy competition concerns in fibre infrastructure, paving the way for the merger of the two businesses.

Vodacom has proposed to acquire a 30% interest in Maziv, which owns Vumatel and Dark Fibre Africa. Vodacom will transfer its fibre business to Maziv.

The proposed merger was blocked by the tribunal after a recommendation by the commission, saying the transaction’s anticompetitive effects would be permanent and implications for the public far-reaching.

Vodacom, Maziv and trade, industry and competition minister Parks Tau appealed the tribunal’s decision at the Competition Appeal Court. 

“This agreement follows constructive engagements between the commission and the merger parties to remedy the deficiencies in the previous conditions identified by the tribunal in its prohibition of the merger,” said commission spokesperson Siyabulela Makunga.

Makunga said there were three primary competition concerns not adequately addressed by the proposed conditions at the time of concluding the tribunal hearings:

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

As part of the public interest commitments, the merging parties agreed to:

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

After the agreement, Makunga said the commission will not oppose the appeal applications by the merging parties and Tau. The commission will inform the court how the enhanced conditions address the concerns it previously raised with the proposed transaction. 

Vodacom said in a statement that the agreement marks "a significant milestone in our ongoing efforts to enhance digital infrastructure and connectivity in South Africa. This development follows additional concessions agreed to by Vodacom and CIVH – the current owner of the fibre assets that will form part of Maziv, including Vumatel and Dark Fibre Africa." It said the Competition Appeal Court is due to consider the matter on 22 July.

Vodacom Group CEO Shameel Joosub said: “We are thrilled with the Competition Commission’s decision, as it aligns with our purpose of connecting people to a better future and our vision of bridging the digital divide through world-class connectivity - reaching more homes and businesses, including underserved communities. 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.”