Vodacom and Neotel are preparing to lodge applications with SA's regulatory and competition authorities.
This comes after the two companies yesterday announced Vodacom would spend R7 billion to buy out SA's second national operator. The next step is to seek approval from the Competition Commission and the Independent Communications Authority of SA (ICASA), Neotel CEO and MD Sunil Joshi says.
Joshi says the Vodacom and Neotel teams now need to come together to put the regulatory and competition applications together, which he expects will be done within the next few weeks. He anticipates the process taking between six and nine months to wrap up, but hopes it will be done quickly so that certainty can be provided to all stakeholders.
Neotel offers Vodacom a "package" that includes spectrum, fibre and transmission capability, as well as its business customer base, says Joshi.
Growing
The operator, which launched in 2007, has access to more than 15 000km of fibre-optic cable, including 8 000km of metro fibre in Johannesburg, Cape Town and Durban, as well as two chunks of 12MHz of space in the 1 800MHz spectrum range, two units - each of 5MHz - in the 800MHz range, and two blocks of frequency in 3.5GHz.
The parties will tell ICASA that Neotel's spectrum is being used effectively, and it will continue to do so, says Joshi. Yesterday, Vodacom CEO Shameel Joosub said Vodacom would not transfer the spectrum, but rather merge its fixed enterprise business with Neotel, leaving the orange operator as a standalone entity.
Joshi adds the company believes its purchase by Vodacom will increase competition in the sector. He notes, however, that it has been a challenge since September, when the announcement was made, to complete the due diligence required, as well as to focus on the business.
Neotel's top line, profit and customer base have been growing in the year to March, says Joshi. He says more details will be released on Monday, when it shares its year-end results with the media.
In the six months to September, Neotel turned over around R1.8 billion and reported earnings before interest, tax, depreciation and amortisation of R470 million. It invested R220 million in its network.
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