AFTER almost two years of talks and strong opposition from rivals, the R7bn takeover bid of Neotel by Vodacom has collapsed.
The two said on Tuesday the discussions were stopped because of regulatory complexities.
The termination of the deal is a blow for both companies. Neotel has been left in limbo as it needs capital for its infrastructure rollout especially now that its competitors are spending significantly. It has been operating for more than eight years and while it has shown signs of improvement, it has struggled to provide adequate competition to fixed-line rival Telkom.
For Vodacom the deal would have accelerated its fibre network and long-term evolution network rollout as it aimed to gain access to Neotel’s lucrative radio frequency spectrum.
There is a shortage of spectrum needed to fast-track 4G network infrastructure.
Although Vodacom is likely to look for other spectrum opportunities, Naila Govan-Vassen, an analyst at Frost & Sullivan, said any acquisition was expected to be blocked until the completion of the migration to digital TV broadcasting.
The move to digital will free up much needed spectrum for faster wireless networks.
Vodacom Group spokesman Byron Kennedy said access to additional spectrum remained a priority and the delay by the government in allocating it was becoming a "serious constraint".
"Access to additional spectrum will enable us to continue meeting the rising demand for data services and roll out LTE optimally.
"Moreover, the additional spectrum would allow us to alleviate the current strain on voice services," he said.
Vodacom still sees Neotel as an attractive asset.
Ms Govan-Vassen said Neotel’s fixed-line infrastructure was still attractive to operators wanting to provide fibre to the home services.
Neotel’s majority owner Tata Communications on Tuesday did not comment on whether it planned to inject more capital into Neotel and if it would consider other bids.
It said it remained "committed" to Neotel.
Neotel could still receive offers from other local or international companies. Director Kennedy Memani said the shareholders were fully behind the business.
Vodacom branding on the Ponte Building in Hilbrow, Johannesburg, in 2011. Picture: GALLO IMAGES/FOTO24/FELIX DLANGAMANDLA
AFTER almost two years of talks and strong opposition from rivals, the R7bn takeover bid of Neotel by Vodacom has collapsed.
The two said on Tuesday the discussions were stopped because of regulatory complexities.
The termination of the deal is a blow for both companies. Neotel has been left in limbo as it needs capital for its infrastructure rollout especially now that its competitors are spending significantly. It has been operating for more than eight years and while it has shown signs of improvement, it has struggled to provide adequate competition to fixed-line rival Telkom.
For Vodacom the deal would have accelerated its fibre network and long-term evolution network rollout as it aimed to gain access to Neotel’s lucrative radio frequency spectrum.
There is a shortage of spectrum needed to fast-track 4G network infrastructure.
Although Vodacom is likely to look for other spectrum opportunities, Naila Govan-Vassen, an analyst at Frost & Sullivan, said any acquisition was expected to be blocked until the completion of the migration to digital TV broadcasting.
The move to digital will free up much needed spectrum for faster wireless networks.
Vodacom Group spokesman Byron Kennedy said access to additional spectrum remained a priority and the delay by the government in allocating it was becoming a "serious constraint".
"Access to additional spectrum will enable us to continue meeting the rising demand for data services and roll out LTE optimally.
"Moreover, the additional spectrum would allow us to alleviate the current strain on voice services," he said.
Vodacom still sees Neotel as an attractive asset.
Ms Govan-Vassen said Neotel’s fixed-line infrastructure was still attractive to operators wanting to provide fibre to the home services.
Neotel’s majority owner Tata Communications on Tuesday did not comment on whether it planned to inject more capital into Neotel and if it would consider other bids.
It said it remained "committed" to Neotel.
Neotel could still receive offers from other local or international companies. Director Kennedy Memani said the shareholders were fully behind the business.
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