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As Vodacom and CIVH approach the regulatory and competition authorities to approve a transaction pooling their fibre network assets, SA’s Internet Service Providers’ Association (ISPA) seeks reassurance that the mobile operator’s historical closed access culture will be swept aside should the deal succeed.
ISPA’s 205 Internet Service Provider (ISP) members have, to date, struggled to obtain wholesale offerings from Vodacom for on-selling to consumers. Conversely, Vumatel and DFA have been pivotal in fostering fierce competition amongst ISPs by historically providing wholesale, fibre-based deals.
Promised cash injections to advance the rollout of high-speed fibre in South Africa are to be welcomed, but ISPA is concerned about the ability of a traditional closed access culture to be successfully married to an historically open access, entrepreneurial-based culture.
CIVH (Community Investment Holdings) is the holding company of DFA and Vumatel and it is a long-time proponent of rolling out fibre in South Africa according to an open access model that sees different resellers tapping into the base fibre offering and then competing to offer business and consumers different value-added high-speed broadband packages.
This has directly benefitted consumers and driven down the cost to communicate.
Vumatel is South Africa’s largest fibre-to-the-home (FTTH) network operator, while DFA provides fibre services in and between the country’s towns and cities.
On completion of the proposed transaction, Vodacom will hold a 30% to 40% share in a newly-formed entity currently dubbed InfraCo.
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.
ISPA has lodged an objection with the Competition Commission and provided requested information. The Commission has previously expressed concern about high levels of concentration of ownership in the telecoms industry.
If we are to continue fostering robust competition in South African telecoms, it doesn’t seem particularly smart to ISPA to allow the largest company in the mobile space to merge with the largest company in the FTTH and national long distance fibre space.
