The Competition Tribunal has hit back at suggestions that its administrative capacity is at fault for the exceptional amount of time it has taken to reach decisions regarding key deals in the technology sector.
The tribunal has been sharply criticised by industry players for the time it took to investigate Vodacom’s proposed acquisition of a co-controlling 30-40% stake in Maziv, the parent of fibre broadband operator Vumatel.
The tribunal is yet to furnish its reasons for blocking the deal – a move that came as a surprise to the merging parties – leaving the companies in limbo. They have filed notice to appeal the decision at the competition appeals court, but aren’t able to build their case without the tribunal’s reasons document.
Blue Label Telecoms, meanwhile, has been waiting nine months for the tribunal to give its go-ahead – or not – of its plan to take control of mobile operator Cell C. The Competition Commission recommended last April that the transaction be approved. (Communications regulator Icasa last week gave its approval for the transfer of Cell C’s network and spectrum licences to Blue Label.)
The delays have cast the competence of South Africa’s competition authorities into doubt, according a senior competition lawyer who declined to comment on the record owing to the need to work closely with both the commission and the tribunal.
Asked to comment on the criticism over the delays in making decisions in the Vumatel and Cell C cases, the Competition Tribunal has defended the time it has taken to conclude its investigations.
‘These processes take time’
“The tribunal is enjoined to conduct its hearings in accordance with the principles of natural justice, which means affording all the parties an opportunity to access the record, to request discovery of documents, to file their papers including filing factual witness statements and economic expert witness statements, before hearing the matter. These processes take time and are in the nature of legal proceedings,” the tribunal said in e-mailed response to questions from TechCentral.
“It bears mention that in the year to date (April-December 2024), 99% of mergers filed with the tribunal were heard within the required time frames. In the financial period 2023/2024, the tribunal heard 94% of mergers within the stipulated time frames,” it said.
Read: Big twist in Vodacom, Maziv merger saga
As an example, the tribunal said that in the Cell C case it had to schedule in intervention applications by MTN, Vodacom, Pepkor (a retail group) and CellSAf (a Cell C shareholder). The applications were heard by the tribunal in July and August 2024, with all but Vodacom’s application being granted. The tribunal said this takes time.
“For each matter, a timetable is set that makes provision for interested third parties who wish to intervene, to do so; other interlocutory matters raised by parties and discovery processes; the filing of factual and expert witness statements; and hearing dates. Hearing dates depend, inter alia, on the availability of all parties and their legal representatives and economic experts,” it said.
This doesn’t help the merging parties, though, especially in a sector where changes happen quickly and time is of the essence when engaging in mergers and acquisitions.
The protracted delays in the delivery of an outcome in the Vodacom-Maziv deal resulted in uncertainty that led to a sharp decline in investment in new fibre infrastructure, with the merging parties uncertain as to where to deploy capital and the rest of the market taking a “wait and see” approach. The effect on foreign direct investment is even more significant.
Read: Blocking Vodacom, Maziv deal ‘makes no sense’: Pieter Uys
Speaking to TechCentral during a Remgro results call in September – Remgro has a 57% stake in Maziv parent CIVH – CEO Jannie Durand warned that delays by the competition authorities have led to R3-billion to R4-billion not being invested in the ground. This could have gone into fibre deployment. Durand described the situation as a “an opportunity cost not just to CIVH but also to the country”.
The Competition Tribunal cited the complexity of the Vodacom-Maziv deal as one of the reasons the process took a long time and cited the same reason for the delay in furnishing its reasons for rejecting the deal.
But the competition lawyer TechCentral spoke to has challenged this perspective by pointing out that the bulk of the reasons document is compiled as the matter is being heard, with the reasons section of the document – a relatively small part of it – completed after the hearings have been concluded.
A December report in the Sunday Times suggested there are bigger issues troubling the competition regulators, pointing specifically to personal, political and ideological rifts at the Competition Commission.
Employees have accused commissioner Doris Tshepe of poor management, extravagance and pushing for decisions like the Vodacom-Maziv one that harm economic growth. But the tribunal insists it is the nature of the cases themselves that are causing the delays.
Read: EFF breathes fire over Vodacom’s Maziv deal
“Mergers that raise very complex competition and public interest issues, such as the Vodacom/Maziv transaction, take longer to adjudicate. The tribunal must balance the interests of workers, owners and consumers to the benefit all South Africans, as the Competition Act enjoins it to do,” said the tribunal. – © 2025 NewsCentral Media
Get breaking news from TechCentral on WhatsApp. Sign up here.
Don’t miss:
