Without the planned Vodacom-Neotel deal, Neotel will remain financially constrained and incapable of investing to the level required to create a substantial fibre network. This is according to Vodacom CEO Shameel Joosub.
Speaking at the Icasa hearings on the application for the acquisition of Neotel by Vodacom, Joosub said that Vodacom’s ability to develop world-class mobile data services will also be constrained if the deal is stopped.
“After the deal, Vodacom together with Neotel will become a more powerful competitor in the fixed space,” Joosub said.
“We will accelerate investment in fibre-to-the-home and fibre-to-the-business to create a wider footprint and better services,” he said.
“Customers will benefit, particularly those enterprise customers who currently have no realistic alternative to Telkom for their fixed services.”
Vodacom’s spectrum battle
Joosub also highlighted that Vodacom is severely constrained by a lack of spectrum.
“We have the largest customer base of any mobile company in South Africa and our data traffic is growing faster than our competitors off a bigger base, yet we hold less mobile spectrum than Telkom or MTN,” said Joosub.
“This has necessitated that we find new ways to use our spectrum more efficiently, something that we do better than any other company, but we have reached the limits of what is possible.”
He said that access to Neotel’s spectrum through appropriate commercial arrangements will partially address this disadvantage.
“Neotel’s spectrum provides us with some breathing room – it relaxes the constraint on our ability to compete,” said Joosub.
“It enables us to offer more LTE capacity or more 2G capacity, or some combination of both.”