Pieter Uys, chairman of fibre operator Maziv, has sharply criticised the Competition Tribunal’s decision to block Vodacom’s acquisition of a co-controlling stake in the company, saying the call “makes no sense”.
Uys, who also holds a senior leadership role at Maziv investor Remgro and who is a former CEO of Vodacom Group, was speaking to Sunday Times journalist Chris Barron in an interview published on Sunday (paywall). He told Barron that the tribunal’s rejection of the merger makes a mockery of government assurances to investors that South Africa is open for business.
On 29 October 2024, the tribunal surprised the merging parties, which had agreed to a range of conditions they believed would have allowed the deal to proceed, by announcing it would side with the recommendation of the Competition Commission that the deal be blocked on competition grounds. The tribunal has not yet provided the reasons for its decision.
The process at the competition authorities has taken three years, a lifetime in the technology industry and a delay that has been roundly criticised not only by those who supported the transaction but also by those who were opposed to it.
The move is seen as a devastating blow to Maziv and its shareholders, which had planned to use the proceeds of the Vodacom investment to plough R10-billion or more into the deployment of fibre networks in underserviced parts of South Africa, including townships. The decision could also halt consolidation in the industry that had been expected to follow the merger.
Uys told the Sunday Times that the tribunal’s decision is “not the message we want to send out to the world”.
“The president (Cyril Ramaphosa) stands up every year and says he’s calling industry to commit to infrastructure investment. This is a perfect example of infrastructure investment, and the public interest benefits we’ve committed to make it a no-brainer,” Uys told Barron.
‘Too long’
He also lambasted the competition authorities for the time it took them to consider the merits of the transaction. “To leave companies that want to invest billions in the country in limbo for three years like the competition authorities did, is just too long, it’s unacceptable,” said Uys.
Vodacom Group CEO Shameel Joosub previously described the tribunal’s decision to prohibit the merger as “deeply surprising and disappointing”.
Read: Vodacom and Maziv: a contrarian viewpoint
Vodacom said even the department of trade, industry & competition, which has oversight of the competition regulators, had supported the merger. This was based on the merging parties committing to:
- Investing at least R10-billion over a five-year period, predominantly in low-income areas;
- Passing at least a million new homes in lower-income areas over a five-year period;
- Creating up to 10 000 new jobs;
- Establishing a R300-million enterprise and supplier development fund to prioritise the development of small businesses;
- Providing high-speed internet to over 600 adjacent schools and police stations at no cost; and
- Vodacom investing up to R14-billion into South Africa through the transaction.
“I am deeply surprised and disappointed by the tribunal’s decision. South Africa desperately needs additional significant investment, especially in digital infrastructure in lower-income areas,” said Joosub.
“Our investment of up to R14-billion would have changed millions of lives and created thousands of jobs. This comes after the concerns of our competitors, involved in the competition hearings process, and the department of trade, industry & competition were comprehensively addressed through remedies and commitments by the parties,” he said. — © 2024 NewsCentral Media
