A court ruling against the Independent Communications Authority of SA (ICASA) will have "no material bearing" on its plans to buy Neotel, says Vodacom.
The North Gauteng High Court in Pretoria on Friday ruled that a decision by ICASA to approve the transfer of control of licences from Neotel to Vodacom should be set aside in its entirety and with costs.
However, Vodacom's executive head of media relations, Byron Kennedy, points out "the proposed modified transaction announced on 8 December 2015 excluded Neotel's spectrum and licences, therefore Friday's judgment has no material bearing on the modified transaction".
The original R7 billion buyout of Neotel by Vodacom has been on the cards since May 2014 but came up against strong opposition from rival telco operators and other industry players because of the potential competitive consequences of the transfer of Neotel's much sought-after radio frequency spectrum licences.
In December, Vodacom decided to take the spectrum off the table and announced it and Neotel had reached an agreement on a "modified transaction". The new deal would see Vodacom acquire the majority of Neotel's assets "related to its fixed-line business as a going concern", but excluding Neotel's licences. Neotel would also offer a roaming arrangement to all the mobile network operators, including Vodacom.
Last week's ruling from the high court was related to applications from Telkom, MTN, Cell C and Internet Solutions that were launched last year before Vodacom announced the modified transaction. The parties applied separately but agreed all the applications should be heard together.
Telkom's managing executive of group communication, Jacqui O'Sullivan, says the company still welcomes the decision and "believes that it was taken in the best interests of sustainability in the industry".
MTN SA chief corporate service officer Graham de Vries would only say the company had taken note of the judgment and "acknowledges the contents of the decision".
Despite Vodacom's claims that the ruling would have no bearing on the deal going forward, the judgment found a number of issues with ICASA's decision to approve the licence transfers which it ultimately found "unlawful".
The judgment from judge DS Fourie, which ITWeb has in its position, found ICASA's decision could be "reasonably suspected of bias" because of issues including a meeting between the regulator and Vodacom which had no recorded minutes, as well as a lack of compliance with section 9(2)(b) of the Electronic Communications Act which deals with black economic empowerment equity rules.
Neotel, Vodacom and ICASA were ordered to pay the costs of all four applications.
ICASA spokesperson Paseka Maleka says the regulator "is still studying the court's judgment on the matter and will have a position as soon as the decision has been taken internally".
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