MTN’s CEO ‘surprised’ regulator blocked Vodacom’s fibre consolidation plan

Ralph Mupita says the South African Competition Commission’s decision goes against global trends

MTN Group’s CEO, Ralf Mupita, has expressed surprise that South Africa’s Competition Commission has blocked the proposed merger of Vodafone’s fibre unit with Vuma­tel and Dark Fibre Africa.

A South African newspaper has quoted him saying, “I think we were sur­prised by the rul­ing. I think the part that sur­prises us par­tic­u­larly is look­ing at fixed wire­less access and fibre as mar­kets in and of them­selves.

“We always looked at it as forms of tech­no­logy to get to cus­tom­ers. Our pos­i­tion on con­sol­id­a­tion still remains intact and in fact has been rein­forced by what we are see­ing in other mar­kets.”

Voda­com intended to acquire a 30% stake in Maziv, which owns Vuma­tel and Dark Fibre Africa.

Mupita argued that the current South African mar­ket struc­ture for fixed-mobile con­ver­gence could not profitably support so many players. He added, “The horse has bolted on that; it’s just a mat­ter of time. We need to accept in South Africa that con­sol­id­a­tion is inev­it­able” and stated only two play­ers could con­tinue to invest in loc­al infra­struc­ture.

Subject close to the heart

Mupita has his own axe to grind in commenting on the regulator’s most recent edict. MTN has tried and failed several times to acquire incumbent Telkom to gain control of its Openserve fibre infra­struc­ture busi­ness. The latest attempt collapsed due to perceived regulatory hurdles. More recently, Telkom ruled out accepting any takeover bids.

MTN is trailing behind rivals in fibre build-out in the South Africa and is deploying fixed wire­less access (FWA) to help hit its target of passing 2 million premises by 2025.

Part of the Competition Commission’s rationale regarding the Vodafone deal is to encourage greater competition between 5G-enabled FWA and fibre, to give consumers more choice and keep prices down.

Tribunal next

The Commission’s recommendations will be examined at a tribunal where Vodacom and Maziv will have the opportunity to argue their belief that the proposed deal is for the public good and will help close the digital divide as the would make the fibre infrastructure available on a non-discriminatory, wholesale basis.  

As the recom­mend­a­tions were still to be argued before the tribunal, Voda­com and Maziv inten­ded to show­case the strong pub­lic interest and pro-com­pet­it­ive advant­ages that the pro­posed trans­ac­tion would have on the fibre mar­ket, and the coun­try.

Voda­com said the pro­posed trans­ac­tion would help bridge the digital divide and enhance com­pet­i­tion in the fibre mar­ket as the parties had com­mit­ted to ensur­ing access to Maziv and Voda­com’s fibre assets through an open access, non-dis­crim­in­at­ory pri­cing model.