Telkom takes Vodacom spectrum agreement to Competition Tribunal

Telkom believes that the Vodacom spectrum agreement with Rain should be declared as a merger.

Telkom has said it wants the Competition Tribunal to declare Vodacom’s spectrum agreement with Rain as a merger that should have been notifiable in terms of the Competition Act.

Vodacom recently extended and renegotiated its roaming agreement, which improved the cost of its capacity bought from Rain. Roaming agreements enable smaller operators the ability to offer services to their subscribers in areas where they lack their own network infrastructure, giving them the ability to compete with the large operators.

Telkom group executive for regulatory affairs and government relations Siyabonga Mahlangu said Vodacom’s ability to control Rain’s spectrum entrenched its position as a dominant player in a highly concentrated market.

“It is important that the effects of spectrum arrangements on competition are scrutinised, 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,” Siyabonga said.
However, a Vodacom spokesperson told IOL that both the Competition Commission and the Independent Communications Authority of SA (Icasa) investigated the agreements between Vodacom and Rain in 2018. “The commission found that the 2018 agreements do not constitute a merger in terms of the Competition Act.”

The spokesperson further stated that, in its discussion document on the Market Inquiry into Mobile Broadband Services in South Africa, Icasa stated that the arrangement has facilitated the expansion of Rain as a wholesale and retail competitor in mobile broadband, which Icasa deemed to be pro-competitive.

“Vodacom remains confident that the agreements between Vodacom and Rain do not constitute a notifiable merger and do not contravene the Competition Act.”