Published: November 4, 2024
Maziv’s ambitious efforts to expand its fibre network across South Africa have encountered a significant obstacle following the Competition Tribunal’s decision to block a merger with Vodacom. The proposed deal would have seen Vodacom invest R6 billion for a 30% stake in Maziv and an additional R4.2 billion for infrastructure development aimed at increasing access to fibre broadband for millions of South Africans.
In a recent interview, Maziv’s CEO, Dietlof Mare, expressed deep concern over the implications of the Tribunal’s ruling. He emphasized that without the support from Vodacom, Maziv faces serious challenges in paying down its debts and raising necessary capital.
The merger was expected to create South Africa’s largest fibre network, but the Competition Commission had opposed the deal, arguing it could lead to a monopoly in the market. The Tribunal has yet to release its reasoning for blocking the merger, and Vodacom is currently considering whether to appeal the decision.
Mare refrained from commenting on how this ruling might impact the company’s existing debt, especially after Standard Bank assisted in refinancing R25 billion in debt last year—a move recognized as South Africa’s largest debt transaction of 2023.
Maziv was founded in May 2022 with the intention of establishing a robust network and leading the fibre-to-the-home (FTTH) and fibre-to-the-business (FTTB) sectors. Starting with a network of 15,000 km and serving two million homes, the company aimed to enhance connectivity, particularly in under-served areas.
Despite the setback, Mare stated that the company was not solely reliant on the Vodacom deal to succeed. He highlighted Maziv’s current market share of approximately 30% in a country with 17 million homes, of which six million have fibre lines nearby.
The anticipated investment from Vodacom would have significantly accelerated network expansion, particularly in low-income areas, and was projected to create around 10,000 jobs. Without this funding, however, Maziv will need to monetize its existing assets and focus on convincing homeowners to connect to the fibre lines running past their properties.
Mare acknowledged that the overall market for fibre expansion is slowing, with operators now connecting significantly fewer homes than before. He pointed out that banks are tightening their funding for capital expansion, complicating efforts to improve coverage in under-serviced regions.
Despite the challenges, Mare remains optimistic about Maziv’s potential, advocating for an uncapped fibre product priced at R99 per month, which has shown promise in trials in Johannesburg’s Alexandra township. He believes that innovative solutions will be crucial as the company navigates this difficult landscape.