Vodacom ready to bring real competition to Telkom

Vodacom CEO Shameel Joosub said the delay in Vodacom’s acquisition of Neotel because of regulatory approval is extremely frustrating.

Speaking to CNBC Africa, he said the regulatory processes are taking too long. “We are onto our ninth extension with the Competitions Commission,” said Joosub.

He added they are also still waiting for Icasa to rule on the transaction.

These delays, he said, are particularly damaging considering what Vodacom is trying to achieve. “We are stepping up and taking the role of being the second network operator.”

Joosub is referring to bringing true competition to Telkom through acquiring Neotel, and then using its deep pockets to fund the company.

He said Neotel needs funding to roll out fixed-line infrastructure to get South Africa closer to international standards.

“South Africa’s fixed-line penetration rate is less than 5%, while most developed countries are between 75% and 100%.”

The Vodacom CEO said Neotel is a vehicle for them to contribute to the fixed-line market, and offer fibre-to-the-home and fibre-to-the-business in South Africa.

Opposition to the deal

Cell C has warned that Vodacom’s planned acquisition of Neotel will threaten its business, and could have devastating effects on the local telecoms market.

MTN is also opposing the deal, arguing that Neotel’s spectrum will give Vodacom an unfair advantage over its rivals.

Joosub is dismissing these concern as baseless. “There is almost a unanimous view that the deal will benefit the consumer.”

The Vodacom CEO revealed they have less spectrum than all the other operators, despite the fact that they have the biggest network and the most customers.

Joosub added that spectrum needs to have investment behind it to create value, and that is exactly what Vodacom is planning to do.

He said the industry is forced to make a plan to get spectrum because of government’s digital TV migration delay, and the Vodacom-Neotel deal and the MTN-Telkom partnership are examples of such plans.