MTN unfazed by Vodacom’s move to merge with Maziv, a fiber infrastructure company. This week, the Competition Tribunal continues to hear testimonies from factual and expert witnesses regarding the proposed merger between Vodacom and Maziv.
The proceedings follow the South African Competition Commission’s recommendation in August 2023, advising against the proposed merger. Explaining the reason for its decision, the competition regulator noted the proposed deal would hinder competition in several markets.
At the time, Community Investment Ventures Holdings (CIVH) and Maziv claimed that the Commission’s recommendation didn’t mean the end of the merger process and disclosed plans to approach the tribunal to make their case for the merger’s approval.
Remgro-owned CIVH created Maziv in 2022 by folding its fibre assets, Vumatel, and Dark Fibre Africa (DFA), into one big fibre infrastructure company.
Under the Vodacom-Maziv deal, the mobile operator, through a combination of assets of approximately R4.2 billion ($231.8 million) and cash of at least R6 billion ($329.8 million), seeks to acquire a 30% stake in the two-year-old infrastructure company, with an option to increase the stake by 10%.
Contrary to the take of the Competition watchdog, CIVH and Vodacom argue the merger will benefit the market as Vodacom fiber assets will become commercially available on an open access, transparent and non-discriminatory basis.
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Additionally, both companies agree that the investment will help Maziv expand fiber infrastructure to an estimated one million new households in lower-income areas. Create up to 10,000 new job opportunities. Free up not less than R10 billion ($594.6 million) for capital expenditure. And support the creation of small to medium enterprises through an R300 million fund.
The stand of MTN
On its part, MTN believes the investment in South Africa’s fiber network infrastructure to be positive. And sees the consolidation of the fiber industry as inevitable and desirable. Charles Molapisi, CEO of MTN South Africa, stated that the company neither opposes the merger nor supports the block of the proposed Vodacom-Maziv merger.
“Where there is market consolidation, scrutiny is required to ensure there is no substantial harm to competition. If material concerns of anti-competitive conduct arise. These should be sufficiently mitigated by conditions that are comprehensive, effective, monitorable and enforceable,” Molapisi added. MTN also confirmed that they are participating in the ongoing Competition Tribunal’s Vodacom-Maziv merger hearings after the tribunal contacted the telecom provider to request information and solicit its opinion in line with standard practice.
