Internet service providers launch objection to Vumatel-Vodacom merge

South Africa’s Internet Service Providers’ Association (Ispa) has asked for a commitment from Vodacom and CIVH that the Vumatel and DFA fiber networks will remain open access.

Vodacom and Community Investment Ventures Holdings (CIVH) announced a R13.2-billion deal in November that would see the fiber assets of both companies being merged into one network.

CIVH owns Vumatel and DFA.

Under the terms of the deal, the two companies will transfer their fiber assets to a new entity. Vodacom will own 30%, with the option to acquire an additional 10%.

“Ispa seeks reassurance that the mobile operator’s historical closed access culture will be swept aside should the deal [receive regulatory approval],” the industry association stated.

Ispa said its 205 members have struggled to negotiate wholesale offerings from Vodacom to resell to consumers.

“Conversely, Vumatel and DFA have been pivotal in fostering fierce competition amongst ISPs by historically providing wholesale, fiber-based deals.”

Ispa said the promised cash injections to advance the rollout of high-speed fiber in South Africa are to be welcomed.

However, it remains concerned about the ability of a traditional closed access culture to be successfully married to a historically open access, entrepreneurial-based culture.

Ispa announced that it objected to the deal in a submission to the Competition Commission.

“The Commission has previously expressed concern about high levels of concentration of ownership in the telecoms industry,” Ispa stated.

“If we are to continue fostering robust competition in South African telecoms, it doesn’t seem particularly smart to Ispa to allow the largest company in the mobile space to merge with the largest company in the FTTH and national long-distance fiber space.”

Vumatel CEO Dietlof Mare previously told MyBroadband that Vuma remains committed to its open access model.

Mare said Vuma would continue building, owning, and operating high-speed fibre-to-the-home networks using a wholesale open-access model.

Now read: Vuma acquires 45% stake in Herotel

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