MTN bemoans Vodacom acquisition of Neotel

2014-11-16 15:00

In an appeal to the competition commission and the Independent Communications Authority of SA (Icasa), MTN claims Vodacom’s acquisition of Neotel will hurt it.

Vodacom announced in May that it was planning to buy Neotel in a R7?billion deal. Neotel has laid about 15?000km of fibre optic cable and has access to valuable spectrum that Vodacom can use to expand its 4G high-speed network.

“MTN can confirm it has raised certain concerns with the competition commission and Icasa regarding the proposed transaction. MTN will not comment further on the matter,” said MTN spokesperson Bridget Bhengu.

According to Bloomberg, in a written submission to Icasa, MTN said the deal would allow Vodacom to start a high-speed 4G network and bolster its ­already dominant position.

Vodacom is the leading mobile operator in South Africa with 27?million subscribers on its network, while MTN has 25?million subscribers.

In its submission, MTN said the network, market and cost advantage would be hard to attack, and ownership of the spectrum should return to the regulator in the event of Neotel changing ownership.

Vodacom spokesperson Richard Boorman declined to comment.

Opposition from MTN comes on the back of its own network-sharing deal with Telkom, which competitor Cell C is opposing.

The deal between MTN and Telkom is essentially a super-roaming agreement, where they roam on each others’ networks. But the deal does not include Telkom making its spectrum available to MTN.

Cell?C has made submissions to the competition commission opposing the deal. The network has also taken both MTN and Vodacom to the commission, accusing them of discriminatory pricing.

Both MTN and Vodacom have bemoaned the lack of spectrum that is holding back the industry.

The lucrative 800 megahertz band of spectrum needed for high-speed internet is currently occupied by the broadcasters and will only be available once the country migrates to a digital television signal from an analogue television signal, a process that has been delayed. The Vodacom-Neotel deal is expected to be wrapped up by April next year.

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