Vodacom drops bid to acquire Neotel’s spectrum

December 8th, 2015
Vodacom won’t acquire Neotel’s spectrum any more amid opposition from rival companies, writes GARETH VAN ZYL.

Last year, Vodacom launched a R7bn bid to buy Neotel – a deal that was initially planned to give the mobile network a greater fixed line network footprint and access to more radio spectrum to roll out faster broadband services.

However, on Tuesday morning, Vodacom announced that it was only going to acquire the “majority of Neotel’s assets related to its fixed line business as a going concern, excluding, inter alia, Neotel’s licences”.

These licences pertain to Neotel’s spectrum, electronic communications network (ECN), and its electronic communications network services (ECNS), Vodacom said.

Vodacom’s decision to drop its bid for Neotel’s spectrum comes amid Cell C and MTN having previously expressed opposition to the deal. Cell C, in a statement in June, also said that spectrum is the “most contentious issue raised by various industry stakeholders” regarding the Vodacom-Neotel deal.

Meanwhile, Vodacom’s announcement that it won’t acquire Neotel’s spectrum comes after the Competition Tribunal of South Africa last month agreed to indefinitely postpone a hearing regarding the merger.

Vodacom asked for a postponement of the tribunal hearings because it said it was exploring “a revised transaction structure” of the Neotel deal.

Vodacom, though, has also provided an update on its upcoming Competition Tribunal hearing this week.

“Accordingly, Vodacom South Africa and Neotel have submitted to the Competition Tribunal the signed transaction documentation in respect of the restructured transaction,” Vodacom said in a market update to shareholders.

“The Competition Tribunal will consider the restructured transaction at a pre-hearing set down for the 10th December 2015,” said Vodacom.

Vodacom is South Africa’s biggest mobile network with around 30 million subscribers.




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