Shadow over South Africa’s fibre networks

Association of Comms and Technology (ACT) CEO Nomvuyiso Batyi has called on the Competition Tribunal to review its decision to block the Vodacom-Maziv merger.

Announced in 2021, the deal would have seen Vodacom acquiring a 30% to 40% stake in the Vumatel and DFA parent company for upwards of R13 billion in cash and assets.

The companies and industry experts regarded the deal as a pivotal next step in expanding fibre Internet connectivity in South Africa, especially in lower-income areas.

However, the Competition Tribunal blocked the transaction in October 2024, aligning with a recommendation from the Competition Commission from around a year earlier.

ACT was established by several of South Africa’s largest telecommunications companies to represent their shared interests and concerns.

While Vodacom is one of its members, ACT also represents the company’s major competitors, including MTN, Telkom, Cell C, and Rain.

In an article for Sunday Times, Batyi warned that the Tribunal’s call had cast a “shadow of uncertainty” over South Africa’s digital future.

“The tribunal’s decision, unfortunately, sends a chilling message to potential investors as well as budding SMMEs,” she said.

Batyi said that achieving meaningful progress in expanding access to digital services in South Africa required a willingness to explore innovative avenues, including strategic mergers.

She argued these agreements could unlock synergies, drive efficiency, ensure transformation, and attract further investment.

“At a time when government has explicitly called for increased infrastructure investment…the industry finds itself constrained by regulatory decisions that fail to align with these priorities,” Batyi said.

“South Africa’s ICT sector is a critical enabler of economic growth, and policy misalignment of this nature risks not only stalling transformation but also slowing down the broader digital economy’s expansion.

She criticised the lengthy deliberations that the Independent Communications Authority of South Africa (Icasa), Competition Commission, and Competition Tribunal undertook in the process — only for the deal to be blocked.

“The decision took nearly three years before being rejected, during which time market conditions evolved, capital deployment was delayed, and strategic momentum was lost,” Batyi said.

“Such delays highlight the urgent need for greater regulatory efficiency and predictability, ensuring that merger reviews do not inadvertently stifle the very investment, innovation, and transformation they are meant to support.”

Recommended steps

Batyi urged the Department of Trade, Industry, and Competition (DTIC) and Competition Tribunal to re-evaluate the long-term implications of blocking the deal.

This must include a thorough review of the decision and its impacts on SMME development, infrastructure investment, and South Africa’s overall competitiveness in the digital economy.

ACT is also hoping that the government and Tribunal will foster a collaborative environment by engaging in open and constructive dialogue with industry stakeholders.

This would aim to identify alternative pathways for achieving the shared goals of transformation, competition and inclusive growth.

Batyi also said that regulatory clarity must be prioritised to provide clear, timely, and consistent guidelines for mergers and acquisitions in the ICT sector.

This will ensure that decisions are made in a timely manner, based on a comprehensive understanding of the industry’s dynamics.

Government appealing blocking

The Competition Tribunal published its 6,700-word summary with reasons for the decision to block the deal in late March 2025.

Vodacom and Maziv were given 10 working days to study the full 373-page classified decisions document and submit which details needed to be redacted before it also goes out to the public.

That is a very short turnaround considering the Competition Tribunal took four months to publish the reasons, while it was only allowed 20 business days to do so.

The Tribunal argued the reasons were impossible to deliver within the prescribed deadline due to the matter’s complexity.

The Vodacom, Maziv, and the DTIC previously filed their intention to review the ruling at the Competition Appeal Court pending the publication of the documents.

Trade and industry minister Parks Tau explained that Vodacom and Maziv had agreed to substantial public interest conditions with the Competition Commission to get the deal over the line.

The commitments included:

• Investing a minimum of R10 billion over a five-year period, focused on low-income areas
• Creating up to 10,000 new jobs
• Establishing a R300-million enterprise and supplier development fund for SMME development

The minister said these were in line with South Africa’s priorities for industrialisation and investment to foster economic growth and create jobs.