Vodacom’s R7bn offer to buy fixed-line and internet provider Neotel has been approved by South Africa’s communications regulator subject to two conditions.
The Independent Communications Authority of South Africa (Icasa), which has been deliberating the proposal for about a year, will allow the Johannesburg-based company to proceed with the deal, the regulator’s chairman Stephen Mncube said today. The takeover will be subject to compliance with a local ownership law and adherence to terms regarding the roll-out of broadband infrastructure and services, he said. “We are pleased to receive approval for the transaction,” Vodacom said in an e-mailed statement. “We will work with ICASA to finalise the conditions of the approval.”
Vodacom shares pared declines and were 0.7% lower at R133.50 as of 3 pm in Johannesburg, having been as much as 2.3% down earlier today.
Vodacom, 65% owned by UK-based Vodafone Group, agreed to buy Neotel from Tata Communications of India in May 2014. The deal would enable Vodacom to extend internet services for small-to-medium sized businesses. The company has the most mobile-phone subscribers in Africa’s most industrialised economy. Competitors including MTN Group Ltd., Africa’s biggest wireless operator, and Cell C oppose the purchase because they say Vodacom would become too dominant.
South Africa’s Competition Commission has yet to rule on the deal!!