Vodacom South Africa has bought a co-controlling equity stake in Community Investment Ventures Holdings’ (CIVH) fiber assets Dark Fibre Africa (DFA) and Vumatel. The deal has not been concluded yet as it awaits approval from the Cometition Commission in South Africa.

Under ordinary circumstances the approval by the Competition Commission would be taken as a formality and expected to be concluded within several months. However, in this case, there is opposition for the deal to go ahead. The Internet Service Providers Association of South Africa (ISPA) is opposing Vodacom’s acquisition of CIVH fibre assets citing that this will disadvantage many Internet Service Providers in South Africa. Specifically, ISPA is arguing that Vodacom is known for making it difficult for ISPs to purchase wholesale fibre and thus by growing their network with the addition of Vumatel and DFA networks, this could be a potential monopoly.

Another side of the argument is that by having Vumatel and DFA as part of Vodacom, this reduces the competitiveness of the industry and in the end it will be customers who suffer, along with the ISPs.

It remains to be seen whether the Competition Commission agrees with this argument by the ISPA and its over 200 member ISPs. Perhaps there is a third way where the Commission approves the deal but stipulates some terms under which it approves it to ensure competitiveness and that Vodacom doesn’t shut out ISPs. Furthermore, this is a concern and highlights why internet access cannot be left purely in the hands of private companies as it is to a great extent, a public utility.

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Fibre competition in South Africa

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