10-07-2025
Vodacom gets go-ahead to close Maziv deal and dominate the fibre game
Government ministers are praising the megamerger to fibre up South Africa's digital future – but at what cost?
After years of regulatory wrangling Vodacom has finally secured the right to buy a 30% co-controlling stake in Maziv – the parent company of Vumatel and Dark Fibre Africa (DFA) – with an option to boost that stake to 40%.
The deal, first tabled in November 2021 at about R13.2-billion, will see Vodacom throw its own fibre assets (valued at R4.2-billion) into the pot. On paper, it's a marriage of scale and ambition; in practice, it may be a test of South Africa's ability to balance digital expansion with healthy competition.
The transaction has faced fierce regulatory resistance, with the Competition Commission initially recommending against it in August 2023.
The Competition Tribunal went further, officially prohibiting the deal in October 2024, citing substantial competition and public interest concerns.
The tribunal's detailed reasoning, released earlier this year, stated that the deal's 'anti-competitive effects will be permanent' and would 'impact millions of South African consumers' – concerns that were not outweighed by temporary public interest benefits.
An about-turn
At this point the deal seemed dead, until Vodacom, Maziv and Minister of Trade, Industry and Competition Parks Tau lodged an appeal with the Competition Appeal Court, with hearing dates reserved for 22 to 24 July 2025.
In a dramatic turnaround on Tuesday, 8 July 2025, the Competition Commission announced an agreement with Vodacom and Maziv on revised conditions that address previous concerns.
'The Commission is confident that the revised conditions agreed with the merger parties will ensure that South Africa will benefit from the continued competitive prices and product choices in this critical sector,' said the suddenly more agreeable commissioner Doris Tshepe.
For the government the stakes are enormous. Minister of Communications and Digital Technologies Solly Malatsi hailed the agreement as a leap forward for digital inclusion.
'The solution reached substantially addresses the concerns raised by the Commission. It will also contribute to digital transformation and deliver clear benefits to the South African public,' he told Daily Maverick, praising commitments to lower broadband prices and improve connectivity.
Tau was also understandably upbeat. 'The substantial public interest commitments made by the merging parties will significantly improve access to affordable internet for underserved communities, thus enabling easier participation in economic activity, particularly for young people.'
The minister further suggested the deal would help South Africa join the global digital economy in areas such as artificial intelligence and the Internet of Things – ambitions that have so far remained largely aspirational.
Changing the fibre game
For Vodacom this move is about more than fibre – it's about futureproofing. CEO Shameel Joosub described the decision as 'thrilling', aligning with Vodacom's mission to bridge the digital divide.
'Should the transaction be approved by the Competition Appeal Court, I'm confident that it will enable us to accelerate network expansion, help address the cost to communicate and contribute meaningfully to job creation,' Joosub said.
Vodacom's traditionally weak position in the fixed-line broadband space made this deal a strategic imperative. By partnering with Maziv, it inherits a massive fibre footprint almost overnight.
For real though, Maziv is no small fry. The wholly owned subsidiary of Community Investment Ventures Holdings (CIVH) is home to major assets like Vumatel and DFA, and has a stake in Herotel.
CIVH itself is majority-owned (57%) by Remgro, alongside other black-owned investment vehicles like New GX Capital and Community Investment Holdings (CIH), which bring much-needed BEE weight to Maziv's corner during regulatory scrutiny.
Vodacom's initial 30% stake (potentially rising to 40%) effectively gives it co-control over South Africa's largest fibre networks, adding significant influence in both residential and enterprise segments.
The merger transforms Vodacom-Maziv into a dominant fibre juggernaut, fundamentally reshaping who owns South Africa's digital highways.
After the deal, Vodacom-Maziv (through Vumatel and DFA) will hold:
34.5% of all homes passed (2.2 million); and
34.4% of all homes connected (885,000).
For a sense of scale, Telkom's Openserve trails with 20.9% of homes passed (1.3 million) and 22.9% of homes connected (667,465). Herotel sits at about 9%, MetroFibre at about 8% and Frogfoot at 6%.
The jewel in the crown
For some who have watched this deal closely, this was always about one metric: in the business segment, DFA (under Maziv) already commands a strong position, with a 23% share in fibre-to-the-business and a commanding 35% in fibre-to-the-tower – critical infrastructure for mobile and enterprise connectivity.
This consolidation effectively turns the market into a two-horse race: Vodacom-Maziv and Openserve. Smaller fibre network operators will have to scramble for scraps or find niche plays in underserved towns and business corridors.
To win approval, Vodacom and Maziv pledged a host of public interest commitments to get the ministers in their corner:
Capital expenditure to expand into underserved areas;
Free gigabit fibre lines to public libraries and clinics;
Free FWA services to more police stations;
An increase in the employee share ownership scheme; and
Broader enterprise development support.
But what's in it for Maziv? Why would a true player in the fibre game trade away its hefty advantage? Simple: the deal provides critical capital injection to fund the next phase of fibre expansion, particularly into lower-income and underserved areas.
It also helps address CIVH's substantial debt load, which had reached R19.5-billion by mid-2024.
Sectoral transformation
The industry lobby, Association of Communications and Technology (ACT), had expressed concerns about the initial prohibition.
CEO Nomvuyiso Batyi said it was 'a missed opportunity for South Africa's digital transformation and economic growth', adding that the prohibition felt 'like a step backwards, hindering our collective ability to build a future-proof digital landscape'.
The current agreement directly addresses many of ACT's concerns about the need for investment and transformation in the sector.
The commission will now approach the 22-24 July Competition Appeal Court hearings on an unopposed basis, with this agreement representing a significant compromise that balances competitive concerns with the imperative for investment and expansion in South Africa's critical digital infrastructure.
What this consolidation promises is immense economies of scale that establish significant barriers to entry for new players, and is likely to fuel further consolidation among smaller fibre network operators. The market is now solidified into a duopolistic structure at the core of South Africa's wholesale fibre market, alongside Openserve. DM
