By Nqobile Dludla
JOHANNESBURG (Reuters) -South Africa’s Competition Commission has dropped its opposition to Vodacom’s plan to buy a 30% stake in fibre group Maziv after agreeing revised terms with the parties.
That could increase the chances of the Competition Appeal Court approving the bid by South Africa’s biggest mobile operator to expand its fibre network nationwide.
The Competition Tribunal, to which the Competition Commission makes recommendations, blocked the proposed deal last year, saying it could harm competitors and third parties.
The Competition Commission said on Tuesday that the revised terms substantially remedied competition concerns.
As a result, it will not oppose the deal when an appeal against the Tribunal’s decision is heard in the Competition Appeal Court on July 22, it said in a statement.
“Should the transaction be approved by the Competition Appeal Court, I’m confident that it will enable us to accelerate network expansion, help address the cost to communicate and contribute meaningfully to job creation,” Vodacom Group CEO Shameel Joosub said in a separate statement.
Regulators had been concerned about a reduction in competition in fixed wireless access and fibre to the home, as well as overlaps in fibre to the home infrastructure and potential price increases after the deal.
Another concern was insufficient measures to prevent foreclosures.
To remedy these, the capital spending committed by Maziv will be improved and extended to a five-year period following the deal “to ensure that Maziv remains incentivised to service third-party network operators,” the Commission said.
The companies have also agreed to maintain lower-cost broadband packages in the market, to spend more on new fibre infrastructure, and an increase in employee share ownership, the Commission added.
(Reporting by Nqobile DludlaEditing by Mark Potter)
