The Competition Tribunal’s decision to block a merger between Vodacom and a major fibre operator will likely derail a push by South African telecoms firms to use big M&A deals as a shortcut to digital infrastructure expansion, analysts said. <\/p>\n
The ruling, which blocked South Africa’s top telco from taking a 30% stake in major fibre operator Maziv, could force companies to build their own networks or pursue smaller, less controversial tie-ups, delaying much-needed investment by years. <\/p>\n
For Andrew Bahlmann of M&A advisory firm Deal Leaders International, it is a setback for the entire industry. <\/p>\n
“For telcos and fibre network operators contemplating future mergers, this prohibition of a merger for which the business case was clearly positive indicates that the path to consolidation is fraught with challenges,” he said. <\/p>\n
The communications sector in Africa’s most advanced economy needs significant capital injections to ramp up infrastructure development, particularly if connectivity is to be improved in low income and rural areas. <\/p>\n
Dominant companies like Vodacom and MTN say mergers would allow them to leverage existing networks as a springboard to extending and improving coverage. And some smaller firms, including fibre operators, say tie-ups would provide the funding they need to grow. <\/p>\n
But regulators fear that consolidation could lead to higher prices, less choice and lower quality for consumers. <\/p>\n
The tribunal has yet to detail the grounds for Tuesday’s ruling, and Vodacom, which is majority-owned by Britain’s Vodafone, said it was considering an appeal. <\/p>\n
The South African Competition Commission, which testified before the tribunal that the deal would open the door to further consolidation and harm consumers, welcomed the decision. <\/p>\n
But Old Mutual Wealth Private Client research analyst Tasneem Samodien said it would likely lead to stagnation. <\/p>\n
“What it does is delay investment by current market participants until they determine a commercially viable path to scale,” Samodien said.
\n“For consumers, particularly those in outlying areas where network connection is relatively poor, the roll out of infrastructure could be delayed.”<\/p>\n","protected":false},"excerpt":{"rendered":"
The Competition Tribunal’s decision to block a merger between Vodacom and a major fibre operator will likely derail a push by South African telecoms firms to use big M&A deals as a shortcut to digital infrastructure expansion, analysts said. The ruling, which blocked South Africa’s top telco from taking a 30% stake in major fibre operator Maziv, could force companies to build their own networks or pursue smaller, less controversial tie-ups, delaying much-needed investment by years. For Andrew Bahlmann of M&A advisory firm Deal Leaders International, it is a setback for the entire industry. “For telcos and fibre network operators […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-873216","post","type-post","status-publish","format-standard","hentry","category-telecom"],"acf":[],"_links":{"self":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/873216","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/comments?post=873216"}],"version-history":[{"count":0,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/873216\/revisions"}],"wp:attachment":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/media?parent=873216"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/categories?post=873216"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/tags?post=873216"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}