Icasa approves Vodacom and CIVH fibre merger

SA’s telecom regulator has approved Vodacom and CIVH’s proposed fibre merger, bringing the deal closer to completion. The transaction remains subject to Competition Commission approval.

The Independent Communications Authority of SA (Icasa) said it had approved a series of applications by CIVH-run Dark Fibre Africa (DFA) to transfer the ownership and control of their I-ECS and I-ECNS licences to Vodacom, effective from December 1.

An ECNS licence allows a company to deploy and operate a physical network.

CIVH recently formed a new infrastructure company as part of its R13bn deal announced in 2021 to merge its Vumatel and DFA units with Vodacom’s fibre assets to create one of the largest SA fibre companies. 

Since announcing the deal in late 2021, the parties have been trying to get regulatory and competition approval. 

“The authority has approved the proposed transaction after careful consideration,” said councillor Luthando Mkumatela, chair of the responsible council committee at Icasa, on Wednesday.

The industry has been experiencing a wave of consolidation worldwide as companies look to combine forces instead of going it alone in building expensive telecom infrastructure. Local players, aware of these realities, are brokering their own deals to stay ahead.

At the turn of the century and in the 2010s, the race was about which operator had the most cellphone towers. Now fibre is the game. Telecom companies continue to report growing data revenues and internet use on their networks, driving up the need for a solid infrastructure base.

Base stations and other network infrastructure as well as data centres are all connected with fibre. Expansion in the development and deployment of such infrastructure is expected to drive up usage and demand for fibre for homes and businesses.

“We view the transaction as unlikely to negatively impact the market while making the transferee an effective player in the market. Additionally, the authority views the proposed transaction to be in the best interest of the public,” said the regulator.

gavazam@businesslive.co.za