Neotel spectrum belongs to the state

Sébastien Crozier, CEO of Orange Horizons, the local subsidiary of the global telco Orange, says that should Vodacom take control of Neotel, the latter’s radio frequency spectrum should be given back to government.

In an interview with BusinessTech, Crozier said of a proposed acquisition of Neotel by Vodacom: “I think it’s a real problem for South Africa because, it’s a question of competition.”

Both Neotel and Vodacom confirmed at the end of September that they had entered into exclusive discussions regarding a potential acquisition of 100% of the shares of Neotel by Vodacom SA.

“Is convergence their (Vodacom) real interest in South Africa, or are they more interested in frequency?” Crozier asked.

He said that if the rumoured amount of R5 billion for the deal is true, “we think that it is a very cheap price for a company who has frequency, because it will kill one of their competitors, and they are not only buying turnover, they will also kill a competitor.”

The French national said that Vodacom is already in a strong position, “perhaps too strong. By taking over Neotel, they will reinforce the situation.”

“The question is how will the other players survive, because if you have this type of player in this country…it leaves the others in bad shape,” Crozier said.

The chief executive said that the authority should not allow Neotel to keep the frequency under a different shareholder, namely Vodacom. “The frequency is not supposed to be resold,” Crozier said.

“Frequency belongs to the state, and not private players.”

In May, Neotel CEO Sunil Joshi said that Neotel had trenched 8,000 kilometres of its own metro fibre, reaching 4,200 companies, having invested R500 million in capex in in FY2013, and adding to its total of R5 billion in infrastructure since inception.

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Neotel spectrum belongs to the state