South Africa’s biggest telecoms operator, Vodacom, opened a new tab recently and said it would not look into other M&A deals after its proposed merger with fibre group Maziv was blocked by regulators last month.
The country’s Competition Tribunal’s decision was a setback for Vodacom’s ambitions of expanding its fibre footprint nationwide.
It followed an extensive 26-day hearing in which the merger parties, the Competition Commission, the government, and rivals of Vodacom and Maziv argued for or against the deal, which was initially proposed in 2021.
Vodacom Chief Executive Shameel Joosub said looking at other M&A deals is off the table. “We don’t want to be stuck in the competition authorities for another three years,” he told a media call on Monday after the group reported a 19.4% drop in half-year earnings, hurt by start-up losses at its Ethiopian operations and foreign currency depreciation.
Vodacom shares were down 4.53% at 1122 GMT.
The group, majority-owned by Britain’s Vodafone, opens a new tab and is still awaiting the Tribunal’s detailed reasons for blocking the Maziv merger. “It’s a travesty for South Africa that we’ve lost the opportunity for such a material investment, which would have been between 14 and 17 billion (rand) investment, plus an additional 25 billion in capex,” Joosub said.
The Tribunal can take up to two months to detail the grounds for its ruling, but Joosub said that he hopes to receive it more quickly to help the group prepare for a potential appeal.
It launched Safaricom Ethiopia last year with a consortium led by Kenya’s Safaricom, which is part-owned by the South African company and Vodafone. The consortium bet that the new unit would break even in year four—but this has been pushed back.
“Due to the currency impact in Ethiopia, Safaricom revised the EBITDA break-even target for Ethiopia to FY 2027 from FY 2026,” Joosub said.
Group service revenue declined 1.2% to US$3.33 billion in the six months ended Sept. 30 due to currency headwinds. However, on a normalised basis, it grew 9.9%.
