Final decision on Vodacom’s takeover of Neotel delayed

24 Mar 2015

The Independent Communications Authority of South Africa (ICASA) has decided to give interested parties the opportunity to submit further comments on Vodacom’s proposed takeover of second national operator (SNO) Neotel. Following the January 2015 hearing on Neotel’s application for the transfer of its licences to Vodacom, ICASA received further submissions from several interested stakeholders. ICASA pointed out that all relevant information should be analysed prior to reaching its final decision, and that it would make an announcement once such decision had been made.

As previously reported by CommsUpdate, in May 2014 Vodacom agreed to acquire the smaller operator from its majority-owner Tata Communications of India for ZAR7 billion (USD676 million); the deal is currently open for public comments as part of the Competition Commission (CompCom) approval process. Neotel has 15,000km of fibre-optic cable, including 8,000km of metro fibre in Johannesburg, Cape Town and Durban and is authorised to use 2×12MHz in the 1800MHz band and 2×28MHz in the 3.5GHz band. If Vodacom’s takeover of Neotel is approved, it will also gain access to 2×5MHz in the 800MHz band, as the SNO is the sole operator authorised to use spectrum in the ‘digital dividend’ band for telecoms services. In the January 2015 public hearings on the planned takeover, rivals MTN and Cell C vehemently opposed a Vodacom/Neotel merger. MTN called on ICASA to block the proposed takeover, saying it would give market leader Vodacom an unfair advantage, while Cell C’s representative argued that the merger would further skew the playing field, eliminate a competitor, reduce Vodacom’s incentive to compete and inhibit Cell C’s ability to compete.