Vodacom rivals waiting for deal details
by Khulekani Magubane and Franny Rabkin,
2016-02-29 05:52:46.0
VODACOM’s restructured deal with Neotel was likely to pass muster with the competition authorities, the company said after the High Court in Pretoria set aside the Independent Communications Authority of SA’s (Icasa’s) approval of the transfer of four licences to the cellphone network operator.
However, Vodacom’s rivals and the Competition Commission are yet to be furnished with the details of the restructured deal, which reportedly no longer required a change of control in the licences.
The court said on Friday that Icasa had a duty to consider what the licence transfer would mean for competition in the sector.
The proposed merger had met with fierce resistance from Vodacom’s competitors — MTN, Telkom and Cell C — which argued that it would give the company access to sought-after radio spectrum, enabling it to provide super-fast 4G data download.
They said this would harm competition in the cellphone market irreparably and hurt consumers.
The court case challenged one aspect of the merger: Icasa’s decision to approve the transfer of control of the licences from Neotel’s shareholders to Vodacom’s.
Judge David Fourie said while the Competition Act was meant to "promote and maintain competition", the Electronic Communications Act had a narrower focus — to promote competition in the information, communication technology sector.
Vodacom spokesman Byron Kennedy said the judgment was academic because the deal no longer required a change of control in the licences. The court judgment had no material bearing on the modified transaction, and Vodacom and Neotel were in the process of closing out conditions of the amended transaction, he said.
In the restructured deal, Neotel would offer roaming agreements to cellphone network operators including Vodacom, he said.
Competition Commission spokesman Itumeleng Lesofe said it had not received details about the amended deal from Vodacom, nor had the company notified the commission of its intention to do so.
MTN SA chief corporate executive Graham de Vries said it welcomed the judgment.
Telkom spokeswoman Jacqui O’Sullivan said the court’s decision was taken in the best interests of the industry’s sustainability.
"The judgment has also given rise to … serious concerns regarding Icasa’s processes in reaching decisions," Cell C CEO Jose Dos Santos said.
Mr Dos Santos said Cell C had not received details about commercial roaming agreement offers from Vodacom, but that Cell C had expected a proposal by last month.
Icasa’s Paseka Maleka said it was still studying the judgment and "will have a position (on the judgment) once a decision has been taken internally".
Picture: REUTERS
VODACOM’s restructured deal with Neotel was likely to pass muster with the competition authorities, the company said after the High Court in Pretoria set aside the Independent Communications Authority of SA’s (Icasa’s) approval of the transfer of four licences to the cellphone network operator.
However, Vodacom’s rivals and the Competition Commission are yet to be furnished with the details of the restructured deal, which reportedly no longer required a change of control in the licences.
The court said on Friday that Icasa had a duty to consider what the licence transfer would mean for competition in the sector.
The proposed merger had met with fierce resistance from Vodacom’s competitors — MTN, Telkom and Cell C — which argued that it would give the company access to sought-after radio spectrum, enabling it to provide super-fast 4G data download.
They said this would harm competition in the cellphone market irreparably and hurt consumers.
The court case challenged one aspect of the merger: Icasa’s decision to approve the transfer of control of the licences from Neotel’s shareholders to Vodacom’s.
Judge David Fourie said while the Competition Act was meant to "promote and maintain competition", the Electronic Communications Act had a narrower focus — to promote competition in the information, communication technology sector.
Vodacom spokesman Byron Kennedy said the judgment was academic because the deal no longer required a change of control in the licences. The court judgment had no material bearing on the modified transaction, and Vodacom and Neotel were in the process of closing out conditions of the amended transaction, he said.
In the restructured deal, Neotel would offer roaming agreements to cellphone network operators including Vodacom, he said.
Competition Commission spokesman Itumeleng Lesofe said it had not received details about the amended deal from Vodacom, nor had the company notified the commission of its intention to do so.
MTN SA chief corporate executive Graham de Vries said it welcomed the judgment.
Telkom spokeswoman Jacqui O’Sullivan said the court’s decision was taken in the best interests of the industry’s sustainability.
"The judgment has also given rise to … serious concerns regarding Icasa’s processes in reaching decisions," Cell C CEO Jose Dos Santos said.
Mr Dos Santos said Cell C had not received details about commercial roaming agreement offers from Vodacom, but that Cell C had expected a proposal by last month.
Icasa’s Paseka Maleka said it was still studying the judgment and "will have a position (on the judgment) once a decision has been taken internally".
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