http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.55Change: -0.16
R/$ = 12.30Change: -0.04
Au 1190.41 $/ozChange: -0.60
Pt 1109.50 $/ozChange: 3.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
May 18, 2009

Icasa won’t oppose Vodacom ruling, independence questioned

Back
Engineering|Africa|Consulting|Resources|System|Africa
Engineering|Africa|Consulting|Resources|System|Africa
engineering|africa-company|consulting-company|resources|system|africa
© Reuse this



Communications regulator the Independent Communications Authority of South Africa (Icasa) on Monday said it would not oppose the judgement handed down by the High Court on Sunday, regarding the Vodacom and Vodafone merger.

Sunday’s judgement meant that the Congress of Trade Unions (Cosatu) and Icasa did not get the interdict they sought, and this signalled the go-ahead for mobile operator Vodacom to list on the JSE and restructure, so that UK-based Vodafone holds a majority 65% interest in the company.

The remaining 35%, which was held by Telkom, was unbundled and the company listed on the JSE on Monday.

The regulator “has heard of the judgment”, and although it did not have a copy of the actual judgement in its possession, would not be opposing it. “There wont be any follow up from our side,” said Icasa spokesperson Sekgoela Sekgoela.

On the other hand, Cosatu national spokesperson Patrick Craven on Monday said that “the fight against this deal will continue. Cosatu will be consulting with its lawyers on possible further court action to appeal against the decision, up to the Constitutional Court if necessary.”

“Vodacom group received a letter from Icasa on Friday, May 15, 2009 purporting to rescind its previous decision that the transactions only required notification rather than prior approval from Icasa, and stating that a public consultation process will take place. Vodacom Group continues to believe that only a notification of the transactions to Icasa was required,” said the newly listed Vodacom, in a statement to shareholders on Monday.

Sekgoela confirmed that the envisaged public consultation process would no longer take place.

Icasa initially said that the merger could go ahead without regulator approval.

On Friday, Icasa rescinded the decision after pressure from the Communication Workers Union (CWU), and more recently the Cosatu, which filed court papers requesting the Icasa decision to be set aside.

ICASA INDEPENDENCE QUESTIONED

For Icasa to intervene at this late stage and rescind the initial decision that it took, proves one of two things, explained Africa Analysis telecoms analyst Dabek Pater.

“Either that Icasa staff is incompetent because there was a period of two or three months when the transaction was announced publicly, and they should have been able to investigate it to a sufficient degree, to decide whether they did need to engage in a more open, public transparent process or not. Or otherwise, it would mean that someone has been intervening behind the scenes, suggesting strongly to Icasa that they should step in and support the Cosatu application,” Pater said.

“None of the cases are favourable to Icasa’s image,” he added.

Pater suggested that Icasa does have enough competent staff and resources to dedicate time and effort to a transaction of this size.

Indeed, it was the largest transaction in the South African telecoms market to date.

This posed the question why Icasa chose, so late, to intervene?

“If there is some third party involvement, resulting in Icasa voicing reservations, then that would, unfortunately, mean that it is not as independent as we would like it to be. This is problematic, because the reason we have these institutions is to provide checks and balances to maintain the democratic system,” Pater said in an interview with Engineering News Online.

The initial signal sent to the international investment community was not positive.

“For something like this to happen at the last minute before the listing, and the conclusion of the deal, it presents doubt in the mind of the investors as to the surety of our system, and an assurance that things will go as promised,” noted Pater.

He did add, however, that the High Court decision not to issue the interdict, sent a countering positive message, “reassuring the world that our legal system is still reliable, and sufficiently strong to act independently”.

The need to attract foreign investment into South Africa was emphasised, particularly in the current economic climate. “We cant afford to scare off potential foreign investors by having a political force such as Cosatu bringing the whole process to a grinding halt,” stressed Pater.

It was, however, felt that the debacle did not damage the Vodacom listing. Investors hoping to acquire shares were confident that the listing would go ahead as planned.

“But, had it gone the other way, I think it would have done quite a bit of damage. The positive growth in the share price shows confidence in the company – despite the wobble along the way,” said Pater.

The Vodacom merger with Vodafone was approved by the Competition Tribunal in February 2009, despite the CWU raising concerns that ranged from Vodafone’s alleged “bad record” and “union-bashing” tactics, to the potential decrease in Telkom revenue after the sale of its stake in Vodacom, which would lead to retrenchments at Telkom.

At the end of April, the CWU’s bid to halt Telkom's sale of its 15% stake in Vodacom was dismissed with costs in the High Court in Pretoria.

On May 8, Cosatu applied to the High Court in Pretoria to halt the deal between Telkom and Vodafone, stating that without Icasa approval the transaction was void, and Icasa was entitled to void Vodacom’s license.

When questioned on the issue of Vodacom’s operating license being withdrawn, Sekgoela said, “no, lets not even start speculate about that.”

Cosatu was opposed to the deal stating that it would result in job losses, and loss of revenue at Telkom, which would lose the significant contribution to the bottom line from Vodacom.

Cosatu also said that the entity was a “strategic national asset”, which should not be controlled by a foreign company.

Pater pointed out that there was no factual evidence that any job losses would take place.

Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Telecoms News
Updated 4 hours ago A strike by workers demanding higher pay has forced MTN Group to close some of its South African customer help centres but Africa's No. 1 telecoms firm said it would not bow to the union's demands. Hundreds of entry-level workers led by the Communication Workers...
Ratings agency Standard & Poor’s (S&P) has issued a warning over South African mobile operator Cell C’s R2bn unsecured debt. The ratings agency has raised concern over the unsecured debt which has upcoming maturities in July. S&P has also issued a warning in light of...
Open access fibre infrastructure provider Dark Fibre Africa (DFA) on Monday announced that it would expand its high-speed fibre-to-the-business capabilities in major and secondary cities across South Africa. Complementing various Internet service providers’ (ISP’s)...
More
 
 
Latest News
Updated 34 minutes ago When Wal-Mart Stores Inc spent $2.4-billion on a stake in South Africa's Massmart five years ago, the world's biggest retailer said it was buying a gateway to high-growth markets in sub-Saharan Africa. Despite its powerful US backer, South Africa's number three...
Updated 53 minutes ago The South African government approved the transfer of $10-million to “support the African diaspora in Caribbean countries as part of the World Cup legacy”‚ FIFA has confirmed in a statement. A US indictment claims that the payment was a bribe to then head of regional...
Updated 1 hour 4 minutes ago Parliament faces the second round on Nkandla on Tuesday when a multiparty ad hoc committee debates Police Minister Nathi Nhleko’s report that absolves President Jacob Zuma from paying back any money spent on his private residence. Opposition parties last year walked...
More
 
 
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
 
 
 
 
 
This Week's Magazine
While strongly welcoming the promulgation of the new Part 101 of South Africa’s civil aviation regulations, governing the commercial operation of civil remotely piloted aircraft (RPAs) in South Africa, the Commercial Unmanned Aircraft Association of Southern Africa...
LSM Distributors has contracted engineering consultancy WSP | Parsons Brinckerhoff Africa to undertake the R100-million restoration of the 54-year-old Kyalami racetrack, situated in Midrand. The restoration will assist in re-establishing it as a venue for...
South African Defence Minister Nosiviwe Mapisa-Nqakula has expressed the hope that the defence budget will be significantly increased over the next five years. She did so while addressing the media in her recent budget vote media briefing. The 2015/2016 defence...
The African Development Bank (AfDB) has been an implementing agency for the Global Environment Facility (GEF) since 2008. The relatively young portfolio has 28 projects over 30 countries on the continent according to the 2014 AfDB and GEF annual report released...
PAUL SPEAR Training and development should be an integral and proportionate part of the long-term strategy of all companies, regardless of their size
Investment in South African youth through apprenticeships and learnerships will not only create direct benefits for businesses but will also contribute significantly to job creation and socioeconomic transformation in the country.
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96