Ispa worried over Vodacom’s plans for Vumatel, DFA

The Internet Service Providers’ Association (Ispa), an industry body that represents over 200 ISPs in South Africa, has lodged an objection with the Competition Commission over Vodacom’s plan to buy a significant minority stake in Vumatel and Dark Fibre Africa (DFA) parent CIVH.

Ispa said in a statement on Friday that it is concerned that if Vodacom, “the largest company in the mobile space”, is allowed to go ahead with the deal, it will lead to a lessening of competition. “It doesn’t seem particularly smart to Ispa to allow [Vodacom] to merge with the largest company in the [fibre-to-the-home market] and national long-distance fibre space,” it said.

The association has provided information requested of it to the Competition Commission as the regulator investigates whether to allow the transaction to proceed. It said it wants “reassurance” that Vodacom’s “historical closed-access culture will be swept aside should the deal succeed”.

Vodacom has promised to embrace open access if the deal goes ahead – allowing Internet service providers to sell Internet access to households and businesses using its infrastructure. But Ispa said its membership base has struggled to obtain such wholesale services from Vodacom in the past. “Conversely, Vumatel and DFA have been pivotal in fostering fierce competition amongst ISPs by historically providing wholesale, fibre-based deals,” it said.

“Promised cash injections to advance the roll-out of high-speed fibre in South Africa are to be welcomed, but Ispa is concerned about the ability of a traditionally closed-access culture to be successfully married to an historically open-access, entrepreneurial-based culture.”

Benefitted consumers

CIVH and its subsidiaries have championed open access in South Africa, and this, Ispa said, has directly benefitted consumers and driven down the cost to communicate.

“Vumatel and DFA’s infrastructure investment programmes have provided more South Africans with access to high-speed fibre-based Internet than any other comparable initiatives. As working remotely becomes the norm, it must be ensured that the open-access philosophy — a national policy of South Africa — is protected and expanded.”

Vodacom first revealed its plan to buy into CIVH last November. It said at the time that it would acquire a co-controlling 30% interest, alongside Remgro and New GX Capital, in a new entity called InfraCo.   – © 2022 NewsCentral Media