Telkom CEO admits its Vodacom-Rain complaint is all about spectrum

Telkom CEO Sipho Maseko said there is “in itself” nothing wrong with the Vodacom-Rain agreement, and that they are challenging it in the context of spectrum.

Last month, Telkom announced that it approached the Competition Tribunal to declare the suite of spectrum arrangements between Vodacom and Rain as a merger.

Telkom argued the merger should have been notifiable in terms of the Competition Act because of the multiple agreements between Vodacom and Rain.

It said the agreements granted Vodacom use and control over the deployment of Rain’s spectrum, which included the planning, rollout, maintenance, and service of its radio access network.

“Vodacom’s ability to control Rain’s spectrum entrenches its position as a dominant player in a highly concentrated market,” said Siyabonga Mahlangu, Telkom’s group executive for regulatory affairs and government relations.

He added that it is important that the effects of spectrum arrangements on competition are scrutinised in light of the upcoming spectrum auction.

Telkom is asking the Competition Tribunal to find that the arrangements constitute a notifiable merger and should be subjected to scrutiny by the competition authorities.

Many industry players raised questions about the timing of Telkom’s complaint.

The agreement between Vodacom and Rain has been in force for four years and has passed regulatory approvals.

Industry speculation suggested that it is aimed at the spectrum auction, which is set to take place in 2021.

Speaking to Business Day TV, the Telkom CEO has now admitted that the complaint is linked to the spectrum auction.

Maseko said “in itself there is nothing wrong” with the agreement between Vodacom and MTN, and that Telkom is “challenging it in the context of spectrum that will be released”.

“All that we are arguing is that the regulators and policymakers have to take into account those arrangements so that you won’t get spectrum on top of spectrum on top of spectrum,” he said.

Maseko said there should be fairness and equity in how spectrum is distributed to make sure the government achieves its desired economic outcomes through this process.

Speaking to Classic FM, Maseko said the deal between Vodacom and Rain is not a roaming arrangement, but spectrum sharing arrangements.

He added that these deals need to be approved and there needs to be a determination if one of the parties – in this case Vodacom – has effective control of Rain’s spectrum.

He said it is an important issue to address now because you do not want additional spectrum to be allocated on top of such an agreement.

Sipho Maseko interview

Now read: The case which can crush Rain, but most likely won’t

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Telkom CEO admits its Vodacom-Rain complaint is all about spectrum