ISPs object to Vumatel-Vodacom merger

The Internet Service Providers Association of South Africa (Ispa) has asked Vodacom and CIVH to commit themselves to maintaining open access to Vumatel and DFA fiber networks.

Vodacom and Community Investment Ventures Holdings (CIVH) announced a deal for 13.2 billion rubles. in November, the fiber optic assets of both companies will be merged into one network.

CIVH owns Vumatel and DFA.

Under the terms of the deal, both companies are transferring their fiber optic assets to a new legal entity. Vodacom will own 30% with an option to purchase an additional 10%.

Ispa is seeking reassurance that the mobile operator’s historic closed-access culture will be swept aside in the event of a deal. [receive regulatory approval],” the industry association said.

Ispa said its 205 members struggled to negotiate wholesale offers from Vodacom for resale to consumers.

“On the contrary, Vumatel and DFA have played a key role in developing fierce competition among ISPs by historically providing fiber-based wholesale deals.”

Ispa said the promised cash injection to speed up the deployment of high-speed fiber in South Africa was welcome.

However, he remains concerned about the ability of traditional closed access culture to successfully blend with historically entrepreneurial open access.

Ispa said it objects to the deal in a submission to the Competition Commission.

“The Commission has previously expressed concern about the high level of ownership concentration in the telecommunications industry,” Ispa said.

“If we want to continue to maintain serious competition in South Africa’s telecoms, it does not seem particularly wise for ISPA to allow the largest mobile company to merge with the largest company in FTTH and the national long-distance fiber space.”

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

Mare said Vuma will continue to build, own and operate high-speed fiber optic networks to the home using a wholesale open access model.


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