Vodacom and Rain have merged, Telkom says – and it wants the authorities to scrutinise their deals
- Telkom has asked the Competition Tribunal to declare the spectrum arrangements between Vodacom and Rain as a merger.
- It wants the competition authorities to scrutinise their relationship.
- While details are not public, their arrangement reportedly includes that Rain gets access to Vodacom tower sites, while Vodacom gets to piggy-back on the valuable radio frequency spectrum assigned to Rain.
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Telkom claims its competitors Vodacom and Rain have effectively merged, given their agreements to share infrastructure.
On Wednesday, Telkom asked the Competition Tribunal to declare the spectrum arrangements between Vodacom and Rain as a merger, which should have been reported in terms of the Competition Act.
Telkom says a number of agreements between Vodacom and Rain “grant Vodacom use and control over the deployment of Rain’s spectrum, including the planning, rollout, maintenance and service of its radio access network”. It believes this constitutes a merger, and should be subjected to scrutiny by the competition authorities.
While details of the deal between the two companies are not public, competitors have complained bitterly about the agreement between Vodacom and Rain, which reportedly includes the smaller operator getting access to Vodacom tower sites to build out its network infrastructure, while Vodacom gets to piggy-back on the valuable radio frequency spectrum assigned to Rain.
Last year, Business Insider reported that Vodacom spent more than R2 billion in capital in terms of a controversial roaming agreement with Rain.
According to Telkom’s Group Executive for Regulatory Affairs and Government Relations, Dr. Siyabonga Mahlangu, Vodacom’s ability to control Rain’s spectrum entrenches its position as a dominant player in a highly concentrated market.
“It is important that the effects of spectrum arrangements on competition are scrutinised,” says Mahlangu. “Particularly, in light of the upcoming spectrum auction which will set the ground for the nature of competition in the mobile market for the foreseeable future.”
In response, Rain's chief marketing officer Khaya Dlanga said the company's provision of non-exclusive roaming services to Vodacom has previously been scrutinised and approved by the Competition Commission and Independent Communications Authority of South Africa.
"Rain also competes fiercely in the retail 4G and 5G data markets in South Africa with innovative and affordable unlimited products." He said Rain would study Telkom's complaint in detail before providing further comment.
Business Insider SA has approached Vodacom for its response to Telkom's application, and the article will be updated with its reaction.
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