Community Investment Ventures Holdings (CIVH) has secured a conditional approval from the Competition Tribunal for an acquisition that will give it sole control of last-mile fibre access provider Vumatel.
The Competition Tribunal has set out a range of conditions that CIVH, which acquired its initial shares in Vumatel in June last year, must adhere to for ten years from the date of the implementation of the merger.
Among these conditions are stipulations that the merged entity retain an open-access service provision model for certain services after the merger, increase its transparency mechanisms and adopt a non-discriminatory approach with its customers who compete with Vumatel.
This followed the Competition Commission’s initial vertical and horizontal competition concerns.
Vumatel provides underground fibre broadband infrastructure in residential areas and fibre-to-the-home (FTTH) services for Internet service providers.
CIVH controls fibre-optic company Dark Fibre Africa (DFA) – considered the largest backhaul provider assessed on a regional basis – which builds and operates fibre infrastructure for lease to wholesale customers and provides backhaul services for Vumatel.
DFA also controls FTTH and Internet service provider SA Digital Villages, which specialises in the installation, operation and maintenance of fibre-optic networks in residential areas.
Further, the commission found that JSE-listed investment holding company Remgro indirectly controlled Cape Town-based Octotel, a competitor to Vumatel.
CIVH is jointly controlled by New GX En commandite Partnership II and Industrial Electronic Investment, the latter of which is controlled by Remgro’s Venfin.
Octotel, which also relies on DFA to provide it with backhaul services in the Western Cape, had raised concerns in relation to the proposed merger and was permitted to make submissions to the tribunal as an intervenor, the tribunal says.
Octotel urged the tribunal to prohibit the merger, arguing that the proposed conditions were insufficient to prevent CIVH, through DFA, from favouring Vumatel at the expense of rivals.
In addition to nondiscriminatory, transparent, open-access service conditions set out by the Competition Tribunal, CIHV is also obligated to provide 1 GB/s of free uncapped fibre services for public and private schools that its networks pass.
A second public interest obligation is deemed confidential, owing to business sensitivity, and has not been disclosed to the public.