In 2014, South Africa’s biggest mobile network operator Vodacom launched a bid to buy Neotel. The latter is a telecommunications company that is the second national operator for fixed line telecommunication services in South Africa. Founded in August 2006, the company has become the first direct telecoms competitor to Telkom.
The deal was initially planned to give mobile network operator Vodacom a greater fixed line network footprint and access to more radio spectrum to roll out faster broadband services.
Many South Africans have been keeping up with developments in the Neotel and Vodacom deal.
The latest news seems to indicate that the deal is off.
In February, Vodacom said: “Vodacom announces that its proposed acquisition of the majority of Neotel’s assets related to its fixed line business has lapsed due to regulatory complexities and certain conditions not being fulfilled.”
The deal was a bid to combine Vodacom’s assets and skills with Neotel to accelerate the roll-out of fibre-based services to customers. Vodacom was looking to acquire the assets, customer base and staff of Neotel. The deal was opposed by Vodacom’s competitors, including MTN.
MTN CEO Mteto Nyati commented: “We were one of those companies that objected but we did not object based on the acquisition of Neotel by Vodacom as a principle. We objected to the transfer of the spectrum. With the spectrum on the side, we were all in for supporting the acquisition of Neotel.”
“However, when it came to the transfer of Neotel’s spectrum that was going to make a number one player even more dominant, we felt it was unfair to us and also it was going to create an unfair situation where one player would be able to actually kill all of the other players. Based on that, we really appreciate the outcome that we were hoping for,” he added.
Initially, the Competition Commission conditionally approved the Neotel and Vodacom deal, subject to conditions that address competition and public interest concerns.
The Commission found that the acquisition would result in the lessening or prevention of competition in the mobile telecommunications market.