Fiber Roll-out to the Poor Has Been Held Hostage by Bureaucratic Red Tape
Remgro CEO Jannie Durand has slammed the Competition Tribunal’s regulatory stasis, claiming it has caused a "massive opportunity cost" for both Vodacom and Maziv, as well as the country as a whole. The proposed acquisition of a 30-40% stake in Maziv by Vodacom has been stalled for three years, and Durand believes that if the deal had been concluded earlier, fiber roll-out to low-income communities could have been accelerated.
"This is a clear case of bureaucratic red tape holding back progress," Durand said. "The country’s poor are being held back by the slow pace of fiber roll-out, and it’s unacceptable that we’re still waiting for regulatory approval."
Durand estimates that the delay has cost CIVH, the parent company of Maziv, around R1 billion in fiber roll-out expenditure. He also believes that the uncertainty caused by the regulatory delays has led to a significant decrease in investment in fiber roll-out, with Vumatel, a CIVH subsidiary, being particularly affected.
The Vodacom-Maziv deal, which has been recommended for prohibition by the Competition Commission, would have seen Vodacom invest R6 billion in cash and add R4.2 billion in fiber network assets to Maziv. The deal was touted as a way to accelerate fiber roll-out to low-income communities, but the regulatory delays have meant that this has not been possible.
"The biggest impact of the deal being blocked will be that we will have to slow our ambitions to roll out Vuma Key to many parts of South Africa," said CIVH chairman and Remgro executive Pieter Uys. "We will get there, but it will probably take five or 10 years, whereas we could do it in a much shorter period of time."
The deal was also touted as a way to create jobs and stimulate economic growth, with commitments to invest at least R10 billion in network infrastructure, pass at least a million new homes in lower-income areas, and create up to 10 000 new jobs.
It remains to be seen whether the Competition Tribunal will ultimately approve the deal, but Durand’s comments have added to the pressure on the tribunal to make a decision.
