The Competition Tribunal has approved, subject to conditions, the proposed merger whereby Community Investment Ventures Holdings (CIVH) seeks to increase its shareholding in Vumatel.
Following the merger, CIVH, which acquired its initial shares in Vumatel in June 2018, will have sole control of Vumatel.
The conditions will apply for a period of ten years from the date of the implementation of the merger.
Vumatel is a last mile fibre access provider. It provides underground fibre broadband infrastructure in residential areas and homes. It also provides fibre to the home services to Internet service providers, which, in turn, offer Internet deals to the public.
CIVH controls Dark Fibre Africa (DFA), a fibreoptic company which provides backhaul services to Vumatel. DFA builds and operates optic fibre infrastructure which is leased to wholesale customers such as Vumatel and its competitors in the last mile.
DFA also controls SA Digital Villages, a fibre-to-the-home provider and Internet service provider specialising in the installation, operation and maintenance of fibreoptic networks in residential areas and homes.
The Competition Commission, which assesses large mergers before referring them to the tribunal for a decision, evaluated the merger and raised vertical competition concerns because DFA is considered to be the largest backhaul provider, assessed on a regional basis.
The tribunal has approved the transaction subject to conditions which require that the merged entity retains an open-access service provision model for certain of its services post-merger, as well as increased transparency mechanisms and an obligation not to discriminate against its customers who compete with Vumatel.
The conditions also include two public interest obligations, one of which is confidential due to business sensitivity. The other provides for the merging parties to provide free uncapped fibre services to public and private schools that its networks bypass.