SA Competition Tribunal Blocks Vodacom-Maziv Merger Over Competition Concerns

The Competition Tribunal has issued an order prohibiting the proposed acquisition of Maziv by Vodacom, following significant anti-competition concerns raised by the Competition Commission regarding impacts on 5G Fixed Wireless Access and fibre markets in South Africa.

The Minister of Trade, Industry, and Competition, Parks Tau, acknowledged the Tribunal’s order, which aligns with the Competition Commission’s initial recommendation to block the Vodacom and Maziv merger. The Commission’s assessment pointed to substantial risks of decreased competition, especially in 5G Fixed Wireless Access (FWA) and fibre infrastructure markets, critical sectors in the country’s digital ecosystem.

According to the Department of Trade, Industry, and Competition (dtic), the Ministry had actively participated in the proceedings due to public interest considerations under the Competition Act. In line with national economic priorities, the Ministry had sought commitments from Vodacom and Maziv to increase investments and expand fibre and mobile connectivity, particularly in underserved areas. The DTIC noted that Minister Tau awaits further details in the Tribunal’s full reasoning report to determine appropriate steps going forward.

The Tribunal’s decision, handed down on October 29, 2024, follows a recommendation issued on August 8, 2023, by the Competition Commission to prohibit the merger. The Competition Tribunal, an independent adjudicative body established under the Competition Act of 1998, evaluated concerns that the merger would hinder competition and disproportionately impact low-income regions that could benefit from robust market competition.

Findings Highlighted by the Competition Commission

The Commission’s findings suggest that both Vodacom and Maziv had separate, pre-existing plans to expand coverage independently, particularly targeting underserved, lower-income communities. The Commission warned that combining these firms would likely reduce competition, particularly impacting the affordability of mobile and broadband services for low-income consumers who benefit from competitive pricing in these markets.

Moreover, the Commission raised concerns that the merger could allow Vodacom to favour its own retail businesses while disadvantaging competing mobile network operators, internet service providers, and other fibre operators, effectively creating a more monopolistic environment in South Africa’s fibre and mobile markets.

The Commission also stated that the merger parties' proposed remedies did not sufficiently mitigate anti-competitive concerns. Many of the merger benefits cited by Vodacom and Maziv, such as infrastructure expansion, were already in the pipeline as part of independent initiatives unrelated to the merger.

Tribunal and Commission Roles in Ensuring Fair Competition

The Competition Commission, as one of three statutory bodies under the Competition Act, serves as the investigative and prosecutorial agency in South Africa’s competition landscape. The Tribunal, operating as a court, adjudicates competition-related cases with jurisdiction across the country, upholding market fairness.

In a statement, the Competition Commission expressed support for the Tribunal’s prohibition order, emphasizing that this decision protects consumer interests, particularly in fostering affordable and competitive services in South Africa’s 5G and fibre sectors. The Tribunal’s decision prevents Vodacom, the country’s largest mobile operator, from gaining a controlling stake in Maziv, a major fibre player, preserving competition essential to digital expansion and accessibility across diverse socioeconomic groups in South Africa.