Vodacom: Regulators slow on Neotel deal feedback

Neotel. (Duncan Alfreds, Fin24)
Neotel. (Duncan Alfreds, Fin24)

Johannesburg - Mobile network Vodacom [JSE:VOD] is hoping regulators could provide more clarity at the end of May about whether it will be allowed to buy fixed-line business Neotel.

This is according to Vodacom chief executive officer Shameel Joosub, speaking to journalists on a conference call on Monday morning.

Vodacom, which is South Africa’s largest mobile network with over 30 million subscribers, last year made a bid to buy fixed-line operator Neotel for R7bn.

A Vodacom-Neotel merger would mean more competition for Telkom in South Africa’s fixe- line space.

In Vodacom’s annual results announcement on Monday, the company said “the delay in receiving regulatory approval for the acquisition of Neotel is disappointing” and that "this transaction has been with the authorities for approval for almost a year now”.

But Joosub told journalists that the company could get feedback from the Independent Communications Authority of South Africa (Icasa) and the Competition Tribunal at the end of May.

"I think what we are expecting is probably an answer from the Competition Commission by the end of May, and Icasa has also given us an indication it will have an answer by the end of May,” Joosub said.

"Hopefully in the next two weeks or so we should have a better indication of where we stand," he said.

Despite the delay in the process, Joosub said he is upbeat about the bid to buy Neotel.

"I think we're still confident,” said Joosub.

"I think what we've said in the statement is that it's taking too long.

"And I think that's concerning from the perspective that I think every day lost, is a day lost in which we could have been building out,” said Joosub.

Local regulators have given the green light to other technology mergers in South Africa this year.

On Thursday last week  the Competition Commission recommended that a R2.6bn merger deal between telecoms firm Telkom and IT services company Business Connexion Group be approved.

In January, the Competition Commission also approved a merger deal between e-commerce websites Kalahari and takealot. The kalahari.com website was folded into the takealot.com website last month.

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