Competition Commission takes aim at Vodacom and Vumatel deal

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Competition Commission takes aim at Vodacom and Vumatel deal
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The Competition Commission is has argued that Vodacom’s merger with Maziv will decrease competition in the market.

The Competition Commission has warned that Vodacom ’s proposed acquisition of a stake in Vumatel ’s parent company will be destructive, decreasing competition in the telecommunications industry.

When the deal was announced, the variable portion was R3 billion, making the deal’s total value R13.2 billion. According to the Commission, these powers will give Vodacom operational co-control over Maziv regardless of its minority stake. The argument also includes potential shared incentives between Maziv and Vodacom within the industry and vertical and horizontal concerns.

Therefore, the company will have a strong grip on the supply of dark fibre and its usage by FNOs and MNOs. This means most Internet users in the country rely on mobile broadband, and uncompetitive pricing would disadvantage the poorest of them.Dark fibre, unused optical fibre, is supplied to MNOs to increase the capacity of their backhaul networks and sold to FNOs to supplement their infrastructure.

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