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Answer 1
Starlink–Vodacom Merger Evaluation
Type of Merger
The proposed acquisition of 70% of Vodacom Ltd by Starlink, a wholly-owned subsidiary of SpaceX,
constitutes a conglomerate merger with vertical elements. Vodacom is a leading South African
telecommunications operator offering mobile and broadband services, while Starlink provides global
satellite internet services. Although they do not compete directly in the same product market, their
services are adjacent and potentially substitutable in providing internet access. The merger would
therefore combine a terrestrial telecom provider with a satellite-based internet provider.
Competition Assessment
Under section 12A of the Competition Act 89 of 1998, the Competition Commission must determine
whether the merger is likely to substantially prevent or lessen competition1 .
Market Structure and Concentration: Vodacom is one of the largest operators in South
Africa, competing mainly with MTN, Telkom, and Cell C. The introduction of Starlink’s
satellite service through Vodacom could expand consumer choice, particularly in underserved
rural areas. However, granting Vodacom exclusive access to Starlink technology could
foreclose rivals, reducing long-term competition2 .
Barriers to Entry: Telecommunications markets have high capital requirements and
significant regulatory hurdles. Starlink alone faced difficulties entering South Africa due to
ownership restrictions. Through this acquisition, Starlink bypasses these barriers, but it also
risks raising barriers for future satellite-based entrants3 .
Potential Efficiencies: The merger could generate efficiencies, such as improved coverage,
lower latency, and technological innovation, especially in rural regions. These pro-competitive
benefits may outweigh potential harms4 .
Loss of Potential Competition: While Starlink is not yet operational in South Africa, the
merger eliminates the possibility of its independent entry, which might otherwise have
increased competition in broadband markets. This is a relevant factor in assessing whether
competition is lessened5 .
1: (Competition Act, 1998, s 12A)
2: (Competition Act, 1998, s 12A(2)(h))
3: (Competition Act, 1998, s 12A(2)(b))
4: (Competition Act, 1998, s 12A(1)(a))
5: (Competition Act, 1998, s 12A(2)(h))
Answer 1
Starlink–Vodacom Merger Evaluation
Type of Merger
The proposed acquisition of 70% of Vodacom Ltd by Starlink, a wholly-owned subsidiary of SpaceX,
constitutes a conglomerate merger with vertical elements. Vodacom is a leading South African
telecommunications operator offering mobile and broadband services, while Starlink provides global
satellite internet services. Although they do not compete directly in the same product market, their
services are adjacent and potentially substitutable in providing internet access. The merger would
therefore combine a terrestrial telecom provider with a satellite-based internet provider.
Competition Assessment
Under section 12A of the Competition Act 89 of 1998, the Competition Commission must determine
whether the merger is likely to substantially prevent or lessen competition1 .
Market Structure and Concentration: Vodacom is one of the largest operators in South
Africa, competing mainly with MTN, Telkom, and Cell C. The introduction of Starlink’s
satellite service through Vodacom could expand consumer choice, particularly in underserved
rural areas. However, granting Vodacom exclusive access to Starlink technology could
foreclose rivals, reducing long-term competition2 .
Barriers to Entry: Telecommunications markets have high capital requirements and
significant regulatory hurdles. Starlink alone faced difficulties entering South Africa due to
ownership restrictions. Through this acquisition, Starlink bypasses these barriers, but it also
risks raising barriers for future satellite-based entrants3 .
Potential Efficiencies: The merger could generate efficiencies, such as improved coverage,
lower latency, and technological innovation, especially in rural regions. These pro-competitive
benefits may outweigh potential harms4 .
Loss of Potential Competition: While Starlink is not yet operational in South Africa, the
merger eliminates the possibility of its independent entry, which might otherwise have
increased competition in broadband markets. This is a relevant factor in assessing whether
competition is lessened5 .
1: (Competition Act, 1998, s 12A)
2: (Competition Act, 1998, s 12A(2)(h))
3: (Competition Act, 1998, s 12A(2)(b))
4: (Competition Act, 1998, s 12A(1)(a))
5: (Competition Act, 1998, s 12A(2)(h))
