ICASA gives its conditional approval to Vodacom/Neotel deal

16 Jun 2015

The Independent Communications Authority of South Africa (ICASA) has given its conditional approval to Vodacom’s ZAR7 billion (USD561.6 million) acquisition of domestic operator Neotel, Bloomberg reports. ICASA chairman Stephen Mncube was cited as saying: ‘The takeover will be subject to compliance with a local ownership law and adherence to terms regarding the rollout of broadband infrastructure and services.’ However, the deal is still open for public comments as part of the Competition Commission (CompCom) approval process. If the antitrust authority decides to approve the acquisition, it is highly likely that it would also impose a range of conditions on the deal.

As previously reported by CommsUpdate, in May 2014 Vodacom agreed to acquire the smaller operator from its majority-owner Tata Communications of India. 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. The SNO is the sole operator authorised to use spectrum in the ‘digital dividend’ band for telecoms services, with 2×5MHz in the 800MHz band. 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. In May 2015 Cell C’s CEO Jose Dos Santos said that his company will do whatever it takes to block the deal, adding: ‘We will keep them in court for as long as the legal system allows it, which is two years.’