Competition Commission Rejects Approval for Vodacom-Vumatel Deal

Competition Commission Rejects Approval for Vodacom-Vumatel Deal

The​ Competition Commission ⁤has ⁣advised against the merger ⁣of Vodacom and CIVH, the​ owner of Vumatel, citing concerns about competition. The ⁣companies had submitted ‍a deal worth R13.2 billion to the ​regulator in late 2021, and the process has taken longer‍ than usual, with the deal being⁣ on the Commission’s desk ⁢for 20 ⁤months. While Icasa,‌ the industry regulator,‍ gave‍ conditional approval to the merger, the Competition Commission ‌believes that the proposed transaction could harm competition in various markets and that the conditions‌ offered do not adequately ⁢address ⁤these concerns.⁤ Under the‌ terms of the deal, Vodacom ​and⁤ CIVH ‍would merge their networks into a new entity ‌called Maziv. However, the Commission concluded that the merger would result in the loss of ⁣direct competition between⁣ Vodacom and Maziv in areas where both companies have deployed​ fibre. It‍ also⁢ raised concerns about the potential ⁢foreclosure of competitors and self-preferencing behavior post-merger. The Commission’s investigation showed that fibre⁤ players tend to reduce prices‌ in areas where multiple fibre network providers‌ are present, and the merger could‍ eliminate this price competition. Additionally, the proposed merger could ​prevent or lessen future ‍competition⁤ in relation to ‌fibre and 5G Fixed Wireless Access (FWA). The ⁢Commission also highlighted concerns ​about the impact on⁢ low-income‌ consumers, as the merger could deprive them⁢ of the benefits of fixed competition enjoyed by wealthier and urban consumers. The merging‌ parties have proposed open-access remedies, but the⁣ Commission⁤ believes ⁢these remedies ‍are complex, difficult to monitor, ‌and do not fully address the competition concerns. Despite​ the merging parties’ claims of public ‍interest benefits, the Commission found⁣ that most of these commitments would​ occur even without the‍ merger.

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