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Telecommunications group Vodacom has abandoned its bid for Neotel’s spectrum and Electronic Communications Network Services licences, besides others, choosing rather to focus on the converged network operator’s fixed-line assets.
The Competition Tribunal would now undertake a December 10 prehearing to consider the newly restructured deal that would see Vodacom acquire the majority of Neotel’s fixed-line business assets.
In November, the merging parties requested an indefinite postponement of the tribunal hearings for the drawn-out R7-billion deal in order to unpack a proposed, revised transaction structure.
The new hearings would likely determine how to proceed.
Vodacom and Neotel applied for regulatory approval for the transfer of control of spectrum licences after Vodacom concluded an agreement with India-based Tata Communications in May 2014 for the full buyout of Neotel, whose employees would be absorbed into Vodacom’s fixed enterprise business.
The Independent Communications Authority of South Africa (Icasa) gave its approval for the transfer of control of Neotel’s radio frequency spectrum licences for the 850 MHz, 1 800 MHz and 3.5 GHz bands, a decision that had attracted legal action from MTN, Cell C and Telkom to have Icasa’s process reviewed or the outcome set aside.
At the time, the authority said it was aware that the proposed transaction would result in a consolidation of spectrum, but it viewed it as an opportunity to bridge South Africa’s digital divide.
In line with this, a condition was imposed that would see Vodacom ensure that at least 25% of Neotel’s broadband roll-out was in underserviced areas.
The Competition Commission’s approval placed a two-year moratorium on the use of the spectrum for wholesale or retail mobile services to enable policy-makers to deal with the spectrum challenges in the industry.