Vodacom-Maziv Merger Revived with New Conditions to Safeguard Competition

South Africa’s Minister of Trade, Industry and Competition, Mr. Parks Tau, has welcomed a revised merger agreement between Vodacom (Pty) Ltd and Maziv (Business Venture Investments No. 2213 (Pty) Ltd), following a breakthrough in negotiations with the Competition Commission. The development marks a major turnaround for a previously blocked deal that faced significant antitrust objections.

The Competition Tribunal, in October last year, had prohibited the merger after the Commission recommended against it, citing substantial threats to market competition, particularly in the rapidly evolving Fixed Wireless Access (FWA) and fibre infrastructure sectors. However, after months of engagement, the merger parties and the Commission have now reached a consensus on revised conditions that address the core competition concerns, allowing the deal to proceed.

Minister Praises Public Interest Gains

Minister Parks Tau expressed strong support for the revised agreement, highlighting its potential to transform digital access in underserved communities.

“The substantial public interest commitments made by the merging parties will significantly improve access to affordable internet for underserved communities, particularly benefiting young South Africans,” said the Minister.

The Department of Trade, Industry and Competition (dtic) reiterated that the deal will facilitate inclusive digital participation, support economic empowerment, and enable South Africa to position itself within emerging global tech trends like Generative AI, IoT, and advanced ICT sectors.

Addressing Key Competition Concerns: Three Pillars

The initial prohibition stemmed from three unresolved concerns, each of which has now been addressed through the revised merger conditions.

1. Horizontal Competition Between FWA and FTTH

The first concern was that the merger would reduce competition in home internet markets by combining two major players in the FWA and Fibre-to-the-Home (FTTH) segments. The updated agreement requires Maziv to commit capital expenditure over five years, ensuring continued investment in third-party infrastructure access and the retention of open-access network models.

2. Overlapping Infrastructure and Risk of Price Hikes

The second issue involved geographic overlap in FTTH infrastructure, which could lead to reduced competition and higher consumer prices. Previously proposed conditions had a weak divestiture clause, but the revised version includes a robust structural divestiture process:

• Specified timeframes for selling overlapping assets

• Appointment of a trustee to oversee divestiture if parties fail to comply

• A transparent and competitive bidding process for asset sale to third parties

This measure is aligned with international best practices in merger control.

3. Vertical Foreclosure Risks

Lastly, there was concern that the merged entity could foreclose competitors by denying access to key infrastructure. While existing remedies covered some risks, enforcement challenges remained.

To solve this, the agreement introduces:

• Governance reforms at Maziv to limit Vodacom’s influence over day-to-day decisions

• A fast-track interim relief mechanism that allows for quick regulatory intervention in cases of suspected anti-competitive behavior before long-term investigations are completed

Strengthened Public Interest Commitments

In addition to addressing competition concerns, the revised deal includes enhanced public interest conditions:

• Expansion of fibre rollout to include Fibre-to-the-Business (FTTB) and Fibre-to-the-Site (FTTS)

• Free 1 Gbps fibre connections to public libraries and clinics passed by FTTH routes

• Increased provision of FWA internet services to police stations nationwide

• Boosted Enterprise Development Programmes to support local SMEs

• An enlarged Employee Share Ownership Plan (ESOP) for greater worker inclusion in corporate ownership

“Access to reliable, high-speed internet is the cornerstone of a dynamic economy and a democratic society. These conditions are a significant improvement in ensuring that citizens benefit meaningfully,” said Doris Tshepe, Commissioner of the Competition Commission.

Legal Path Forward

The revised agreement will now be presented to the Competition Appeal Court for final review and approval. The matter is expected to proceed unopposed, reflecting the confidence of all stakeholders in the revised framework.

Minister Tau expressed gratitude for the constructive engagement shown by Vodacom, Maziv, and the regulatory bodies throughout the process.

“This resolution ensures that competition is preserved, while enabling much-needed digital infrastructure investment,” he added.

Institutional Roles Clarified

The Competition Commission, one of the three independent entities under South Africa’s Competition Act, functions as the investigative and prosecutorial arm of the nation’s competition regime. The Competition Tribunal acts as the adjudicating authority or court for such matters, while the Competition Appeal Court serves as the appellate body.

The Vodacom-Maziv agreement reflects collaborative regulatory progress, balancing economic transformation, consumer protection, and technological advancement in South Africa’s growing telecom sector.