Tribunal clears Vumatel’s takeover of Herotel – with conditions

The Competition Tribunal has approved the sale of Herotel to Vumatel, but only subject to an extensive set of conditions aimed at safeguarding competition.

The decision clears the way for Vumatel, which is already a shareholder in Herotel, to acquire full control of the business. Vumatel, a subsidiary of Maziv, is South Africa’s largest fibre-to-the-home operator.

Herotel operates across several layers of the telecommunications value chain, including national and last-mile fibre infrastructure, retail internet access services and fixed-wireless access. The combination raised concerns about market power, vertical integration and access to critical infrastructure.

To address these, the tribunal has imposed binding conditions (PDF) that reinforce open-access principles across the combined group’s networks. These include strict prohibitions on Vumatel and the broader Maziv group from using Herotel’s infrastructure in a way that disadvantages third-party internet service providers, unless access is provided on transparent and non-discriminatory terms.

The merged group is required to continue supplying wholesale fibre and backhaul services to third-party ISPs and operators wherever it is “reasonably capable” of doing so. Pricing must be transparent, published via standard rate cards and structured so internal group entities receive no preferential treatment over independent customers.

Importantly, while the group may discount prices to compete with rivals, it may not charge third-party customers more than its published rate cards – a safeguard intended to prevent subtle forms of foreclosure.

Information firewall

The conditions also impose strict information-firewall requirements. Confidential commercial information received from third-party customers – such as roll-out plans or expansion strategies – may not be shared within the group with any competing business unit. A monitoring trustee, already appointed under earlier merger remedies, will oversee compliance and report regularly to the Competition Commission.

The merged entity must also publish changes to wholesale prices and explain them to regulators, while formally reporting any complaints about access delays or refusals.

Beyond competition remedies, the tribunal placed heavy emphasis on public-interest obligations tied to fibre deployment. Vumatel is required to maintain its pre-merger capital expenditure plans for at least five years and may not scale back its lower-income “Vuma Reach” roll-out in favour of Herotel deployments.

Read: Four years later, Vodacom and Maziv have sealed their deal

Under the conditions, Vumatel must pass 540 000 additional homes in lower-income areas within three years, contributing to a broader obligation to reach one million premises. This roll-out is expected to connect around a thousand schools, too.  – © 2025 NewsCentral Media