SA's second national operator, Neotel, has hit back at those who claim it is trying to avoid oversight from the regulator, and those who argue Vodacom will gain ownership of its telecoms and spectrum licences.
Speaking at the end of two days of hearings into the deal, heard by the Independent Communications Authority of SA (ICASA), counsel for Vodacom and Neotel, Steven Budlender, argued that the arguments raised in opposition to the deal during the hearings had no merit.
Much of the arguments heard over Thursday and Friday dealt with whether ICASA had the power to hear the matter, whether Vodacom was trying to use the current law as a back door to get its hands on more much-needed spectrum, and whether the deal amounted to a transfer of ownership of spectrum.
Telkom argued ICASA has no power to deal with the matter because the regulations it requires do not yet exist, a situation it said Vodacom is using as a backdoor to gain more spectrum. Telkom said the matter should only be dealt with after ICASA issued new regulations to deal with such deals.
Under the amended Electronic Communications Act, which came into effect on 21 May 2014, written permission from ICASA is needed to transfer control of service licences, as well as spectrum. Telecoms lawyer Lisa Thornton previously noted that, before the law was amended, only the transfer of a licence required prior approval, and not transfer of control. This applies to both service and spectrum licences.
However, Budlender hit back at Telkom, saying its argument was self-defeating because if ICASA did not have the power to hear the deal, Vodacom and Neotel would not have needed to ask the authority for permission for the merger. Moreover, he said ICASA did not have to generate new regulations to give effect to the deal as the law does not dictate that it does so, just that it may do so.
Budlender also reiterated that the deal did not amount to a transfer of ownership of licences, an argument the Internet Service Provider's Association and the Wireless Access Provider's Association raised.
This reiterates what Neotel and Vodacom's counsel Paul Kennedy stated yesterday. Kennedy argued the licences and spectrum would not be transferred as they would continue to belong to Neotel, rather control of the company as a going concern would be moved over to Vodacom.
Vodacom's bid for all of Neotel is intended to boost its fibre network, as SA's second national operator has 15 000km of fibre, which will be a catalyst for Vodacom's plans to roll out fibre-to-the-business and fibre-to-the-home. However, ITWeb understands Vodacom is also very keen to get its hands on Neotel's spectrum in the 800MHz, 1.8GHz, and 3.5GHz ranges.
Neotel's spectrum was another contentious issue, with MTN having argued Vodacom will gain an unfair competitive advantage that will leave other operators in the dust if it is allowed to buy all of Neotel. MTN insisted that Neotel give up its spectrum.
Budlender argued that the deal will not give Vodacom immediate access to Neotel's spectrum, as Vodacom will have to enter a commercial agreement with Neotel to use it, which will be subject to ICASA regulations. Moreover, he noted, ICASA has no power to force Neotel to give up its spectrum, a position that is practically impossible in any event.
ICASA will now deliberate the matter before making a decision. Even if ICASA gives the deal the green light, it still has to go through the competition authorities. The matter is still being evaluated before the Competition Commission, and will then be referred to the Tribunal for its consideration because it is a larger merger.
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