Long-time partners Vodacom and iBurst are set to part ways, as Vodacom discusses a possible sale of its stake with other shareholders and interested parties.
Speaking to ITWeb this morning, iBurst CEO Jannie van Zyl confirmed the marriage between Vodacom and iBurst is becoming more difficult for both companies to maintain.
“They [Vodacom] have officially indicated that they will try to exit as a WBS (iBurst) shareholder, because they will want to bid for additional spectrum,” notes Van Zyl.
The difficulty for Vodacom is that it would not be allowed to bid for spectrum in the 2.6GHz and 3.5GHz bands, if it owns a stake in a company that already has spectrum in that range. These bands have become known as WiMax spectrum; however, in reality they can be used for many different wireless technologies, including LTE.
iBurst already owns spectrum in the range, and the Vodacom relationship will prevent it from going out for a range on which it can implement an LTE network.
However, iBurst is equally handicapped by the relationship with Vodacom. “At the moment, it is a case of competition. We resell each other's products, but we are also competing,” adds Van Zyl. He says it has become more difficult to sit at a board level and discuss strategy.
iBurst has, over the last few years, focused on growing its business and wholesale offerings. “With the introduction of lower interconnect, iBurst could really become a competitor to Vodacom in this space,” he noted.
Vodacom and iBurst were joined when the mobile giant's then CEO, Alan Knott-Craig, and his son, Alan Knott-Craig Junior, then head of iBurst, signed a cooperative deal. Knott-Craig senior was also iBurst's chairman at the time.
Vodacom currently holds a 24.9% shareholding in iBurst. The mobile operator declined to comment on the matter, since it is in a closed period. The company will report its numbers later this month.
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