Internet service providers object to the merger of Vumatel-Vodacom

South Africa’s Internet Service Providers’ Association (ISPA) has asked Vodacom and CIVH to ensure that the Vumatel and DFA fiber networks remain open access.

Vodacom and Community Investment Ventures Holdings (CIVH) announced a 13.2 billion rupee deal in November this would see both companies’ fiber resources merged into a single network.

CIVH owns Vumatel and DFA.

Under the terms of the agreement, the two companies will transfer their fiber operations to a new entity. Vodacom will hold 30%, with the possibility of acquiring an additional 10%.

“Ispa seeks reassurance that the mobile operator’s historic culture of closed access will be wiped out in the event of an agreement [receive regulatory approval]”, Affirmed the trade association.

Ispa said its 205 members struggled to negotiate Vodacom’s wholesale offers to resell to consumers.

“Conversely, Vumatel and DFA have been instrumental in fostering stiff competition between ISPs by historically providing fiber-based wholesale deals.”

Ispa said the promised cash injections to advance the launch of high-speed fiber in South Africa are to be welcomed.

However, he remains concerned about the ability of a traditional closed access culture to marry successfully with a culture based on entrepreneurship and historically open access.

Ispa announced its opposition to the operation with a communication to the Competition Commission.

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

“If we are to continue to foster strong competition in South African telecommunications, it does not seem particularly smart for Ispa to allow the largest company in the mobile sector to merge with the largest company in the FTTH and national long-distance fiber space.”

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

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


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