Confidential market information at centre of Vodacom stand-off with Vox and Frogfoot

Construction workers for Vumatel installing fibre optic cables in Parow West. File picture: Ian Landsberg/ Independent Newspapers

Construction workers for Vumatel installing fibre optic cables in Parow West. File picture: Ian Landsberg/ Independent Newspapers

Published Feb 1, 2024


Frogfoot Networks and Vox Telecommunications insisted yesterday that confidential information about market share and pricing submitted to the Competition Commission in its determination against Vodacom’s acquisition of Maziv, which controls Dark Fibre Africa and Vumatel, was accessible to the merging parties.

The Competition Commission has decided against the merger of Vodacom and Maziv on the grounds that the deal combines one of South Africa’s largest fibre infrastructure players, Maziv, and its largest mobile operator, Vodacom.

The commission, after investigations and hearing submissions from other telecom players, also concluded that the would result in foreclosure of competitors post the merger.

Now, Vodacom and Maziv who are the parties to the merger deal, want access to confidential information that Frogfoot and Vox submitted to the commission.

Yesterday, the Competition Tribunal heard presentations from the merging parties and as well as from Frogfoot and Vox regarding issues around access to confidential data.

The Tribunal heard from Jerome Wilson, a legal representative for the merging entities, that it was necessary for Vodacom and Maziv to have “access to the information” in an “unredacted” version.

“Our client doesn't believe, given the way that Vox and Frogfoot has conducted this access question, that there is good faith between the parties. And given that good faith discussions such as they are, have taken five months to get nowhere, and we simply don't have the time to have another so called good faith negotiation with Vox and Frogfoot,” said Wilson in a presentation to the Competition Tribunal.

He argued that economists and lawyers for the merging entities needed to have early access to all relevant information so that they were not compromised as they prepared to take the issue further after the Competition Commission recommended that the tribunal decide against the merger last year.

Shannon Quinn, who represented Vox and Frogfoot at the hearing, said that there was no legal support for the merging parties’ feelings that their fair trial rights were being infringed as their advisers did not have possession “of every single document” that the two companies had made available to the commission for its determination on the merger.

In any case, Frogfoot and Vox had not withdrawn access to the confidential information, the Tribunal heard. It was further told that Vodacom and Maziv kept changing goalposts every time that Frogfoot and Vox offered to meet logistical costs to enable the viewing of the documents either locally or internationally.

“We said we will at our cost accommodate you in London, you can go and see every single document in London. They came back and they said, we also have advisers in Stellenbosch, (and) we said we will accommodate you at our cost in Stellenbosch,” said Quinn.

Wilson, however, insisted that it was imperative for the merging parties’ to have access to copies of the data and documents and of the relevant under the commission's referral points in its determination against the merger.

These had to be made available to the external advisers to the merging parties “for use at their own offices and at the Tribunal” subject to confidentiality undertakings while any excel documents had to be provided in open file electronic format.

Under the proposed merger, Vodacom would take a 30% stake in Maziv in return for no less than R9 billion in cash.

The South African giant telecoms operator would also put up its fibre internet assets valued at about R4.2 billion under Maziv. Although the Competition Commission has ruled against the merger, the Competition Tribunal will hold hearings into the case in May this year.