The Minister of Trade, Industry and Competition, Parks Tau is appealing an order by the Competition Tribunal to stop Vodacom from merging with fibre operator Maziv.
Maziv is the parent company of Vumatel and Fibre Africa.
The Competition Commission noted that Vodacom's proposed 30% acquisition of Maziv will reduce competition in South Africa.
The Commission also argued that the merger would cause irreparable structural damage to the broadband market.
The watchdog said that the merger would create an entity with the ability and incentive to engage in anti-competitive conduct.
This behaviour could have irreversible consequences on the market, and the Competition Commission has argued that the R13 billion merger should not happen.
The commission said that the merger should not go through in late October.
Minister takes action
Tau filed a notice of appeal earlier this week with the competition appeal court and is seeking to have the tribunal’s decision reviewed.
Minister Tau said he wanted detailed reasons of the Tribunal's decision in prohibiting the merger.
The Ministry will then also assess and advise on the next steps in line with the Competition Act 89 of 1998.
Given that the reasons for the prohibition have not been published as yet, Tau said it was prudent to formally note an appeal to the Tribunal's decision.
Once the reasons are provided, Minister Tau said he will assess and advise accordingly.
“The Minister's participation in the merger proceeding was based on public interest grounds which led to substantial public interest commitments that would have significantly boosted investment, created jobs and resulted in growth of fibre and mobile connectivity in communities that lack adequate communication infrastructure,” Yamkela Fanisi, spokesperson for the department said.
Vodacom may also appeal
Vodacom could appeal the Tribunal ruling and was shocked by the ruling.
Vodacom Group CEO, Shameel Joosub, said he was “deeply surprised and disappointed by the Tribunal’s decision”.
The tech company said it had been set to invest up to R14 billion into Maziv.
“South Africa desperately needs additional significant investment, especially in digital infrastructure in lower income areas. Our investment of up to R14 billion would have changed millions of lives and created thousands of jobs,” it said.
IOL BUSINESS