Vodacom abandons bid to buy Neotel

Johannesburg - South Africa’s biggest mobile network Vodacom [JSE:VOD] has walked away from its bid to acquire fixed-line telecoms company Neotel for R7bn.

Vodacom said in a statement on Tuesday morning that its proposed acquisition of the majority of Neotel’s assets has lapsed “due to regulatory complexities and certain conditions not being fulfilled”.

Subsequently, the two companies have agreed that the transaction “can no longer be progressed”.

What are your thoughts on Vodacom's move? Is this good for bad for competition in SA's telecoms space? Tell us by clicking here.

The companies have abandoned the deal after they restructured it last year in December. As part of the restructured deal, Vodacom planned to acquire Neotel’s assets relating to its fixed-line business and not Neotel's spectrum.

“It is disappointing that we have reached this conclusion despite all our efforts to find a way to deal with the complexities of the restructured transaction,” said Shameel Joosub, group chief executive officer of Vodacom, in a statement.

In May 2014, Vodacom launched its R7bn bid to buy Neotel.

The deal 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.

In June last year, the Independent Communications Authority of South Africa (Icasa) and the Competition Commission approved the deal.

Subsequently, the deal went to the Competition Tribunal. However, Vodacom, at the Tribunal, then decided to drop its bid to acquire Neotel’s spectrum amid concerns raised by Cell C and MTN.

Vodacom also suffered another blow to its bid for Neotel when on Friday the North Gauteng Hight in Pretoria ordered that Icasa’s approval of the transfer of Neotel’s operating and spectrum licences to Vodacom be set aside in its entirety.

Vodacom, though, still eyes its own fixed line network.

“Our ambition to increase the rollout of fibre-based broadband services to customers remains,” said Joosub in his statement.

“We will continue to look for spectrum opportunities, as well as opportunities to accelerate our fixed- line business,” added the Vodacom CEO.

Vodacom is South Africa's biggest mobile network with over 30 million subscribers.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders