Vodacom considers appealing Competition Tribunal verdict

Vodacom has been informed by the Competition Tribunal that it has prohibited the proposed investment of up to R14 billion by Vodacom into Maziv, the recently formed fibre holding company of Vumatel and Dark Fibre Africa. The Proposed Transaction was designed to assist Maziv in growing its fibre footprint into lower income areas and would have been highly beneficial for South Africa. During the Competition Tribunal proceedings, which concluded last month, the Department of Trade, Industry and Competition (“DTIC”) described the transaction as having “substantial positive public interest effects” on the basis that the merger parties committed to:

• Investing at least R10 billion over a 5-year period, predominantly in low-income areas.
• Passing at least one million new homes in lower income areas over a 5-year period
• Creating up to 10,000 new jobs.
• Establishing a R300 million enterprise and supplier development fund to prioritise SMME development.
• Providing high speed internet to over 600 adjacent schools and police stations at no cost; and
• Vodacom investing up to R14 billion into South Africa through the transaction.

Commenting on the Competition Tribunal’s decision, Shameel Joosub, CEO of Vodacom Group said: “I am deeply surprised and disappointed by the Tribunal’s decision. South Africa desperately needs additional significant investment, especially in digital infrastructure in lower income areas. Our investment of up to R14 billion would have changed millions of lives and created thousands of jobs. This comes after the concerns of our competitors, involved in the Competition Hearings process, and the DTIC were comprehensively addressed through remedies and commitments by the parties.”

Vodacom awaits the Tribunal’s detailed reasons for prohibiting the transaction in due course, before considering all options to Vodacom, which may include an appeal in the Competition Appeal Court.