Mobile operator MTN has become the latest entity to object to the proposed Vodacom buyout of Neotel, with reports that it has lodged objections to the R7 billion deal with both the communications regulator and the competition authorities.
Bloomberg reports the MTN objection is related to the question of spectrum transfer. The operator is reportedly arguing spectrum transfer is not allowed in SA, and therefore Neotel's spectrum should not be allocated to Vodacom, but returned to the Independent Communications Authority of SA (ICASA) for reallocation.
Neither ICASA nor the Competition Commission could immediately confirm they have received MTN's objection.
MTN's objection comes at a time when the operator is finalising a deal with Telkom to bolster their existing roaming agreement to include bilateral roaming, which includes Telkom outsourcing the running of its radio access network to MTN.
Less competition
The objection also follows opposition to the Vodacom-Neotel deal from Cell C and the Wireless Access Providers' Association (WAPA), which previously lodged papers with the competition authorities. The country's third mobile network, Cell C, voiced its objection in May, shortly after Vodacom and Neotel announced they are engaged in talks that would see Vodacom acquire 100% of Neotel.
At the time, Cell C CEO Jose Dos Santos stated the company would oppose any transaction that would likely lead to a lessening of competition in the market, adding the deal would entrench the dominance of an already dominant player in the market.
Last month, WAPA lodged its objection against the deal, arguing it would stifle competition and lead to job cuts. In addition, the industry body believes the deal will "do little to reduce the digital divide, which it believes should be the country's top priority with regard to broadband".
WAPA chairman Christopher Geerdts noted: "WAPA's concern is that Vodacom's influence will... severely limit open wholesale access and set back, rather than increase, competition and consumer choice."
The association added it believes larger operators tend to cut jobs and cherry-pick customers in the most lucrative suburbs and business parks. It believes SA must build up a complementary strategy, where large and small players coexist and play to their strengths. "In addition, operators with a national backbone need to provide truly neutral and open wholesale."
Defensive
Vodacom declined to comment on MTN's objection this morning, while Neotel could not immediately be reached. MTN spokesperson Bridget Bhengu could not immediately confirm the objection had been lodged.
However, Neotel CEO Sunil Joshi previously commented the company did not see consolidation as a bad thing. On the contrary, he said, it could help smaller players that do not have the scale required to compete on a national level. "Competition is effective in a balanced market defined by a level playing field, rather than a number of smaller players with limited market access."
Vodacom needs Neotel to boost its fibre plans and gain access to spectrum as its network is ready to switch over to 4G in total; the only outstanding issue being a lack of frequency. The company has seen a surge in data use.
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