MTN South Africa has adopted a stance of neutrality regarding the ongoing merger discussions between its industry rival Vodacom and Maziv, a company specializing in fibre infrastructure. The Competition Tribunal of South Africa is currently in the process of hearing detailed accounts from both factual and expert witnesses concerning the potential consolidation of Vodacom and Maziv.
These tribunal sessions are a continuation of the discourse that began following the South African Competition Commission’s recommendation in August 2023. The Commission advised against the merger, citing concerns that it could potentially impede competitive dynamics across multiple market segments.
Despite the Commission’s recommendation, Community Investment Ventures Holdings (CIVH) and Maziv expressed that the Commission’s stance did not signify the termination of their merger efforts. They revealed intentions to present their arguments to the tribunal, hoping to secure approval for the merger.
CIVH, which is under the ownership of Remgro, established Maziv in 2022 by consolidating its fibre operations, namely Vumatel and Dark Fibre Africa (DFA), into a singular, substantial fibre infrastructure entity.
In the proposed transaction between Vodacom and Maziv, Vodacom aims to acquire a 30% interest in Maziv, which was formed just two years prior. The acquisition would involve a mix of assets valued at roughly R4.2 billion (equivalent to $231.8 million) and a minimum cash payment of R6 billion ($329.8 million). Additionally, the deal includes an option for Vodacom to increase its stake by a further 10%.
In contrast to the concerns raised by the South African Competition Commission, CIVH and Vodacom have put forth a counterargument in favor of the merger, suggesting that it would be advantageous for the market. They contend that the consolidation would result in Vodacom’s fibre assets being made available to the market on an open access basis, characterized by transparency and impartiality.
Furthermore, both entities are in agreement that the merger would facilitate the expansion of Maziv’s fibre infrastructure, potentially reaching an additional one million households in lower-income regions. They also anticipate the creation of approximately 10,000 new jobs, the liberation of at least R10 billion (approximately $594.6 million) for capital investments, and the support of small to medium-sized enterprises through the establishment of an R300 million fund.
MTN South Africa, for its part, views the investment in the nation’s fibre network infrastructure positively and considers the trend towards industry consolidation both inevitable and beneficial. Charles Molapisi, the CEO of MTN South Africa, has clarified the company’s neutral position on the merger, stating that MTN neither opposes the merger nor endorses the Competition Commission’s recommendation to block it.
Molapisi emphasized the importance of careful scrutiny in cases of market consolidation to prevent any significant harm to competition. He suggested that any substantial anti-competitive concerns that might arise should be addressed through the imposition of conditions that are thorough, effective, and enforceable, and that can be monitored for compliance.
MTN has also confirmed its participation in the ongoing hearings at the Competition Tribunal regarding the proposed Vodacom-Maziv merger. The telecom giant was approached by the tribunal, which sought to gather information and obtain MTN’s perspective as part of the standard procedural practice.
