MTN bursts bubble surrounding iBurst takeover rumours

3 Oct 2011

MTN South Africa managing director Karel Pienaar has dismissed rumours that the mobile giant is set to acquire Wireless Business Solutions (WBS), the parent company of WiMAX operator iBurst. TechCentral reports that whilst MTN has held exploratory discussions with iBurst, Pienaar has confirmed that an acquisition is ‘highly unlikely’. The talks were driven by MTN’s desire to secure sufficient spectrum to roll out a nationwide ‘fourth generation’ network based on Long Term Evolution (LTE) technology. Pienaar admitted that MTN has entered into talks with a number of industry players, including Sentech, which shut down its own ill-fated ‘MyWireless’ WiMAX network in November 2009, after experiencing widespread technical difficulties.

Pienaar told TechCentral: ‘Spectrum is really critical in the lifeblood of our business, and for LTE we are looking for more spectrum. We are speaking actively to the regulator and to other operators that have spectrum. I absolutely am speaking to iBurst. Is it the only one? Absolutely not. It is highly unlikely there will be an acquisition’. The speculation was prompted by iBurst’s confirmation, last week, that the company had been approached by more that one ‘interested suitor’. According to TeleGeography’s GlobalComms Database, MTN’s rival Vodacom was forced to sell its 24.9% stake in iBurst back to parent company Wireless Business Solutions in September 2010; regulator ICASA had previously stipulated that any company in possession of LTE-suitable frequencies would be barred from acquiring 2.6GHz spectrum in its long-delayed auction. Vodacom readily admitted that relinquishing the frequencies to WBS was a strategic move designed to protect its own LTE ambitions.

South Africa, MTN South Africa, Rain (Multisource/WBS)