S African telecoms regulator in spat over Tata-led Neotel sale

  • PTI, Johannesburg
  • Updated: Jun 22, 2015 16:37 IST

South Africa's telecom industry has locked horns with the regulator of communications over its approval of the sale of Tata-led company Neotel to the country's biggest mobile operator Vodacom.

Telecom regulator Independent Communications Authority of South Africa (ICASA) said that they are unperturbed about criticism over its approval of the sale of Neotel to mobile operator Vodacom.

Vodacom's rival Cell C, one of the last entrants in the mobile sector in the country, has objected vehemently to the sale, claiming that it would give an unfair extra advantage to Vodacom.

Cell-C and other operators in the mobile space have argued against the sale, saying that the radio frequency spectrum allocated to Neotel when it was launched in 2006 as a second national fixed line operator to go ahead with then only fixed line operator Telkom, run by the state, would greatly benefit Vodacom.

Cell C chief executive officer Jose dos Santos said it would use all legal avenues to challenge the merger between Neotel and Vodacom because ICASA had not given its reasons for approving the deal.

But ICASA chairman Stephen Mncube told the weekly that the regulatory body was unconcerned about the Cell C threats.

Mncube also said ICASA would not give any attention yet to calls from other operators that the very scarce spectrum currently held by Neotel be divided up amongst them rather than being given to Vodacom as part of the sale.

Although ICASA has given the sale the green light, the deal is still being considered by South Africa's Competition Commission, whose ruling is expected soon.

ICASA said it would have to wait for that ruling on whether the spectrum will remain with Neotel and Vodacom before deciding how to deal with it.

Vodacom chief executive officer Shameel Joosub has previously expressed his dissatisfaction at the delay in finalising the deal which was first mooted almost a year ago.

Joosub said Neotel would operate a subsidiary of Vodacom, with the priority being to connect a quarter million homes and businesses via fibre-optic broadband through the Neotel deal.

Neotel, in which Tata Communications has an 80% stake, only started showing a profit two years ago after spending the first seven years since its inception building a huge network throughout South Africa.

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