MTN and Rain enter the ring in mooted Vodacom-BVI merger

The Competition Tribunal has given telecommunications giant MTN and Rain permission to intervene in the pending merger hearing involving Vodacom and Business Venture Investments (BVI).

MTN, Africa’s largest telecoms company with nearly 300-million subscribers on the continent, will be allowed to present its case on whether the proposed merger is likely to substantially prevent or lessen competition.

Rain, partly owned by Patrice Motsepe, Paul Harris and Michael Jordaan, will also state its case on the effect of the proposed merger on its ability to compete in respect of retail internet services and mobile services as a result of portfolio effects and bundling.

According to the Competition Commission, the proposed Vodacom and BVI merger would combine South Africa’s largest fibre infrastructure player and its largest mobile operator.

In August, the commission recommended to the Competition Tribunal that the proposed transaction should be prohibited on understanding that it raises both competition and public interest-related concerns and that the proposed conditions tendered for by the merging parties do not address these concerns.

As per the terms of the merger agreement, Vodacom sought to acquire 40% of the ordinary shares of Maziv, controlled by BVI in exchange for a combination of R6-billion in cash and R4.2-billion in assets.

Vodacom has insisted that the merger is good for the industry and consumers. The company has indicated it would defend its proposed merger at the tribunal.

Vodacom’s argument is that the merger will enable Maziv to extend fibre infrastructure to an estimated 1-million new households in lower income areas and create up to 10 000 new jobs.

The transaction, first announced in November 2021, had already received approval from South Africa’s telecom regulator, Icasa.

The Competition Commission has argued that 5G fixed wireless access (FWA) and fibre compete in the same market and that consumers stand to benefit from increasing competitive rivalry between FWA and fibre.

Vodacom is South Africa’s largest mobile provider and a big player in 5G sphere, while Maziv is already the largest fibre-to-the-home player.

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