Khudusela Pitje, founder and CEO of New GX Capital, has criticised South Africa’s competitors regulators over the time they took coming to a choice over the proposed acquisition by Vodacom of a stake in fibre operator Maziv – solely to hunt the deal’s prohibition.
The proposed deal, which was finally blocked by the Competitors Tribunal final October, would have seen Vodacom purchase a 30-40% co-controlling stake in Maziv in a multibillion-rand transaction.
Maziv is managed by CIVH, which is in flip is managed by Remgro. Pitje and his household make up one of many founding members of CIVH, the holding firm of Darkish Fibre Africa (DFA) and Vumatel.
“From my household workplace perspective – and never a CIVH perspective – as an investor, I’m upset in the truth that that is in all probability one of many distinctive companies the place two black households (Pitje’s and businessman Joe Madungandaba’s) had been founding members of what everybody sees at present. In all of the processes, the place you discuss public curiosity, you usually have to deal with BEE, however this enterprise was constructed by two black households, amongst different traders, who had been concerned from the beginning,” Pitje stated in an unique interview with the TechCentral Present to be revealed later this week. “We’re upset to see that such a landmark transaction has been ongoing for over three years.”
The Competitors Tribunal in March lastly launched its causes doc – months after its deadline to take action – explaining its rationale for blocking the deal. Though the complete, 355-page causes doc has solely been made out there to the merging events (for now), the tribunal described the deal as anticompetitive, saying it could finally hurt customers of knowledge providers in South Africa.
Township fibre
However Pitje stated the open-access commitments made by Vodacom, which had deliberate to make its personal fibre property out there to Maziv beneath the deal, would have allowed smaller web service suppliers to take part within the deal’s upside as enterprise would have flowed to them.
In accordance with Pitje, the deal would even have helped to “bridge the digital divide between the suburbs and the townships”, an issue CIVH managed to get round by constructing what Pitje known as “probably the world’s first pay as you go fibre community”.
“All people is aware of find out how to distribute cellular merchandise and different applied sciences, however this we needed to construct from scratch,” he stated.
Learn: Vodacom-Maziv merger struggle heads to courtroom in July
He pointed to Alexandra, a densely populated, low-income township in Johannesburg, the place Vumatel has deployed a low-cost fibre community, providing web entry to households for R99/month. With the pilot in Alexandra having confirmed the idea, Vumatel was reliant on funds from the blocked Vodacom deal to increase this providing to different townships throughout the nation.
Pitje solid doubt on how the tribunal might confidently predict the result of a mannequin the market has by no means tried earlier than, including that long-time Maziv shareholders wouldn’t danger shedding worth on the expense of Vodacom.
“It exhibits an absence of appreciation for the management construction of CIVH. Remgro and ourselves collectively management CIVH on the prime, and Vodacom can be getting some rights at Maziv [below that]. It’s extremely unlikely that shareholders would need to lose worth [to Vodacom] after 20 years of ramping up the community,” stated Pitje.
Pitje stated market consolidation is an ongoing development within the telecommunications sector worldwide, together with in Europe and the Americas, and that is largely pushed by the excessive value of infrastructure roll-out, lengthy funding recuperation instances and thinning margins.
He stated the flavour of consolidation in South Africa is considerably distinctive as a result of the final development includes like-for-like acquisitions, with cellular operators buying others like them and fibre operators doing the identical. The Vodacom-Maziv transaction would have been between a fibre operator and cellular operator however was nonetheless pushed by the identical forces which might be spurring consolidation in the remainder of the world, he stated.
Learn: Vodacom fibre deal is ‘anti-competitive and irreversible’: tribunal
“Regulatory certainty is vital. If you have a look at the worth of property as a overseas investor, what do you low cost for when there may be uncertainty? And as a neighborhood who has labored for 20 years creating worth, how is that worth destroyed within the course of? The losers listed here are the 2 black households who’ve been concerned [in the industry] for 20 years and, probably additionally the lower-LSM markets the place enlargement would have occurred quicker,” stated Pitje.
The competitors attraction courtroom will hear arguments towards the Competitors Tribunal’s resolution to dam the Vodacom-Maziv transaction in July. – © 2025 NewsCentral Media
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