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- A group of internet service providers has objected to a proposed deal that will see Vodacom take a large stake in Vumatel and Dark Fibre Africa (DFA).
- They say Vodacom has a "closed access culture" and that it is difficult to get wholesale services from the company to sell to their customers.
- By comparison, Vumatel and DFA are currently offering them competitive products.
A group of more than 200 internet service providers has objected to the proposed deal that will see Vodacom take a large stake in Vumatel and Dark Fibre Africa (DFA).
The Internet Service Providers' Association (ISPA) - whose members include Rain, Liquid Telecommunications, Openserve, Seacom and Internet Solutions – has written to the Competition Commission, raising concerns about market dominance in the industry as a result of the proposed deal.
Vodacom is in the process of buying a stake of 30% in a newly formed entity called InfraCo, which will own DFA and Vumatel. Vodacom has an option to increase the stake in InfraCo to 40%. Remgro’s Community Investment Ventures Holdings, which currently owns DFA and Vumatel, will own the rest.
Vumatel is South Africa’s largest fibre-to-the-home (FTTH) network operator, while DFA provides fibre services in and between the country’s towns and cities.
"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 fibre space," the association said in its submission to the Competition Commission.
The association says its members are struggling to obtain wholesale offerings from Vodacom for on-selling to consumers. It wants reassurance from the Competition Commission that Vodacom's "historical closed access culture" will be relaxed should the deal succeed.
Vumatel and DFA are currently key in fostering fierce competition amongst ISPs by historically providing wholesale, fibre-based deals, the association says.
Vumatel’s fibre network serves 1.2 million homes, and it has deployed over 31 000km of fibre infrastructure across the country. DFA owns and operates a long distance fibre network spanning in excess of 13 000 km and 37 000 connected circuits.
In response to questions from Fin24, Vodacom only replied that it would adhere to the regulatory processes of the Competition Commission and the Independent Communications Authority of South Africa (Icasa).
