Vodacom cannot take Neotel’s licences: High Court

Vodacom will not be able to take control of licences owned by Neotel as part of the companies’ planned R7-billion merger.

By - February 28, 2016 Share on LinkedIn
Neotel Vodacom deal

Vodacom will not be able to take control of licences owned by Neotel as part of the companies’ planned R7-billion merger. This is according to a report by Bloomberg.

The High Court in Pretoria made the ruling this week, which follows a decision by Vodacom in December to drop plans to take Neotel’s spectrum and electronic communications network services permits.

The mobile operator will still acquire all assets relating to Neotel’s fixed-line business.

However, the group will still gain access to Neotel’s spectrum through a roaming arrangement.

“The merger deal as originally conceived between Vodacom and Neotel is definitely dead in the water now,” telecommunications attorney Dominic Cull told the Sunday Times.

“If Vodacom had to go back to try and reapply for the licences it would take forever.”

Vodacom originally agreed to buy Neotel from Tata Communications in May 2014. The deal was slowed down by competition inquiries, while Telkom and MTN appealed against the merger.

The court decision was in response to an appeal by MTN, Telkom, and Cell C against a ruling by Icasa to give Vodacom control of the licences, stated the Sunday Times.

The deal has also been hampered by Neotel’s CEO Sunil Joshi and chief financial officer Steven Whiley stepping down, after the pair were placed on special leave following R100 million in questionable payments to a company called Homix.

The full report is in the Sunday Times of 28 February 2016.

More on Vodacom

Vodacom LTE-Advanced arrives in more areas – details

WhatsApp regulation in SA – what Vodacom and MTN really want

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