Why Cell C wants Vodacom’s LTE deal with Multisource investigated

Cell C and MTN have raised complaints with regulators over Vodacom’s LTE network deal with Multisource.

According to Vodacom, the deal comprises facilities leasing, services, and roaming agreements between it and Wireless Business Solutions (WBS). WBS was acquired by Multisource in November 2015.

Vodacom said competitors have raised complaints with the sector regulator ICASA and the Competition Commission.

It said the Competition Commission is determining whether the roaming arrangement with WBS is a notifiable merger under the Competition Act.

ICASA is conducting an enquiry to determine whether the transaction contravenes the requirements of the Electronic Communications Act.

It’s about spectrum

According to Cell C, its complaint is about spectrum.

Through its WBS acquisition, Multisource has access to spectrum in the 1,800MHz and 2,600MHz bands.

Operators have been clamouring to receive 2,600MHz spectrum, and only WBS currently has an assignment in the band. Sentech was assigned a block of spectrum in the band, but returned it in 2013.

“Spectrum is a highly-contentious issue in the South African mobile industry,” Cell C told MyBroadband.

“When two licensees that each own scarce and valuable spectrum – such as Vodacom and WBS – conclude a transaction that may involve the use, by one or both of those parties, of the spectrum of the other party, Cell C feels that should be scrutinised to ensure it passes all the necessary regulatory requirements.”

It said the details of the transaction between Vodacom and WBS have not been made available, and Cell C has requested the authorities to look into it.

Multisource network available to all

CEO Shameel Joosub recently said that Multisource’s network is live and carrying traffic.

He said the deal with the company is a strategic partnership for Vodacom, as it gives them room to manoeuvre while the government’s ICT Policy White Paper is being discussed.

It also gives Vodacom access to additional network capacity while South Africa’s migration to digital TV fails to take off, and high-demand 4G spectrum remains unassigned.

Joosub said other operators can make similar agreements with Multisource.

In its recent year-end financial results, Vodacom said its deal with Multisource will result in R1.7 billion future capital expenditure for the group.

Cell C did not answer questions about whether it has tried to make a similar deal with Multisource.

MTN did not respond to requests for comment.

Now read: Multisource’s LTE-A network roll-out is on track – CEO

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Why Cell C wants Vodacom’s LTE deal with Multisource investigated