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Competition Tribunal grants MTN and Rain intervention rights in pending
Vodacom, BVI merger proceedings
The Competition Tribunal (“Tribunal”) has granted both Mobile Telephone Networks (Pty) Ltd (“MTN”) and Rain (Pty) Ltd (“Rain”), respectively, leave to intervene in the pending merger hearing involving Vodacom (Pty) Ltd (“Vodacom”) and Business Venture Investments No 2213 (Pty) Ltd (“BVI”).
MTN and Rain are competitors and customers of the merging parties, with Rain also being a supplier. Both applied to the Tribunal for participation rights in the pending merger proceedings and a hearing in this regard was held on 10 November 2023. During the hearing, the Tribunal heard and subsequently considered submissions by MTN, Rain and the merging parties.
MTN
The Tribunal’s order in respect of MTN grants the mobile network operator leave to intervene as a participant in the merger proceedings in respect of the following matters:
- whether or not the proposed merger is likely to substantially prevent or lessen competition, including by assessing the factors set out in section 12A(2)(b) to (f) of the Competition Act; and
- the conditions proposed by the merging parties and/or to be considered by the Tribunal in relation to any approval of the proposed merger.
Rain
The Tribunal’s order in relation to Rain grants the mobile communications company leave to intervene as a participant in the merger proceedings in relation to the following matters:
- whether or not the proposed merger is likely to substantially prevent or lessen competition in relation to the following theories of harm:
- the effect of the proposed merger on Rain’s ability to compete in respect of retail internet services and mobile services as a result of portfolio effects and bundling;
- the risk and potential effects of input foreclosure, reduction in competition in wholesale markets (including metro fibre backhaul used for mobile networks), and open access to fibre infrastructure and services; and
- information sharing.
- whether the proposed merger should be approved (with or without conditions) or prohibited, including whether any conditions proposed by the merging parties to the Tribunal adequately address any anti-competitive consequences of the proposed merger and/or conditions to be considered by the Tribunal in relation to any approval of the proposed merger.
Background
According to the Competition Commission (“the Commission”), the proposed Vodacom and BVI merger would combine South Africa’s largest fibre infrastructure player and its largest mobile operator. In August 2023, the Commission recommended to the Tribunal that the proposed transaction should be prohibited on grounds that it raises both competition and public interest-related concerns and that the proposed conditions tendered by the merging parties do not address these concerns.
Both MTN and Rain participated in the Commission's investigation of the proposed merger and raised concerns at the time.
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