Vodacom and Rain confident roaming deal would withstand repeat scrutiny

South African mobile operators Vodacom and Rain are confident their roaming tie-up does not contravene competition regulations, they said on Thursday in response to rival Telkom reviving complaints about the deal concluded in 2018.

The move by Telkom comes as South Africa prepares to launch 5G spectrum by March next year. Telkom and other players fear that Vodacom will have more than its fair share of bandwidth because it also effectively has access to Rain’s spectrum.

Telkom contends that Vodacom and Rain have effectively merged because their agreements “grant Vodacom use and control over the deployment of Rain’s spectrum, including the planning, rollout, maintenance and service of its radio access network”.

The partly state-owned company has asked South Africa’s Competition Tribunal – the country’s most powerful competition body, with the final say on recommendations by the Competition Commission – to take another look at the Vodacom-Rain deal.

However, Vodacom and Rain are confident the deal does not constitute a merger or contravene the Competition Act.

“Rain currently provides non-exclusive roaming services to Vodacom and this arrangement has previously been scrutinised and approved by the Competition Commission and (telecoms regulator) ICASA,” Rain’s Chief Marketing Officer, Khaya Dlanga, said in an emailed response to Reuters’ questions.

Vodacom also cited investigations by the Competition Commission and ICASA.

The arrangement “has facilitated the expansion of Rain as a wholesale and retail competitor in mobile broadband, which ICASA deemed to be pro-competitive”, a Vodacom spokesman said, citing ICASA’s document on a market inquiry into mobile broadband.

Details of the deal are not public but competitors have complained that the transaction gives Vodacom a massive advantage over smaller players.

A Competition Tribunal representative was not immediately available for comment.