The R7 billion deal that will see Vodacom buy out Neotel will be required to fulfil a 30% black economic empowerment (BEE) obligation, as a condition set down by the Independent Communications Authority of SA (ICASA) to approve the merger.
The communications regulator will also require Vodacom and Neotel fulfil broadband infrastructure roll-out obligations, in the case of future infrastructure deployment, in underserviced areas, as the second condition for the approval of the deal.
ICASA says it "has established that the implementation of the proposed transaction will result in consolidation of spectrum. The authority recognises that broadband access across the country remains a challenge that needs to be addressed with due speed".
The regulator notes it view deals such the Vodacom-Neotel transaction as an opportunity to attain universal service and access to broadband services by all South Africans, with priority being given to rural and under serviced areas.
In terms of the empowerment condition, ICASA says it recognises it may not be practicable for the applicants to comply with the BEE requirement from the onset. "Therefore the authority wishes to determine the reasonable period within which the applicants should be permitted to ensure compliance with the BEE requirement."
Therefore, to finalise these conditions, the ICASA is embarking on a public consultation process, as is required in accordance with relevant sections of the Electronic Communications Act. All interested parties, including Vodacom and Neotel, are invited to submit written comments within 14 days.
Interested are invited to parties to lodge written representations, specifically in relation to the reasonable period that ICASA should determine compliance with the BEE requirement; and the reasonable target and timelines that ICASA may impose for fulfilment of the under-services rollout condition.
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