Small operators applaud Tribunal’s blocking of Vodacom-Vumatel merger

Small internet service providers are applauding the decision of the Competition Tribunal to block the Vodacom-Vumatel merger.

He points out that Vodacom’s 30-year legacy and significant head start allowed it to dominate the market and its CEO, Shameel Joosub, has been with the company from the start. A Harvard grad with a near-decade-long CEO tenure, Joosub has steadily pushed Vodacom towards deeper market consolidation. “In addition, the claim that Vodacom suddenly wants to provide affordable broadband for rural South Africans rings hollow. Just two years ago, the company argued against the “data must fall” movement, claiming it could not cut data prices without more spectrum.

He says with MTN eyeing Telkom’s network, Vodacom’s acquisition of Maziv would solidify a two-giant monopoly. “Together, these two players could hike prices and squeeze smaller providers out of the market. Smaller operators like those represented by Wapa, which has been bringing broadband to underserved areas for years, would be shut out by Vodacom’s deep pockets and aggressive pricing.”

“This is not about creating a “Rainbow Nation” of internet access for all. It is about creating a closed loop between Vodacom and MTN, where they could set the terms, keep prices high and lock out innovation. If Wapa and smaller providers are squeezed out, rural South Africans will feel the brunt.”Colmer says we must remember that South Africa’s telecom landscape only saw real disruption when companies like Cell C and Rain entered the market.

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