Telkom heads to court over Vodacom-Neotel deal

Telkom has filed papers in the North Gauteng High Court requesting it to review the process undertaken by Icasa when it approved the merger of Vodacom and Neotel.

This comes after Icasa approved the deal under a set of conditions.

  • BEE requirement: Vodacom and Neotel are required to comply with the requirement that 30% of the equity ownership of the individual licence be held by persons from historically-disadvantaged groups.
  • Broadband roll-out: Icasa is considering imposing a condition that at least 25% of any broadband roll-out by Neotel following the deal be undertaken in under-serviced areas.

Icasa said it recognises it may not be practicable for Vodacom and Neotel to comply with the BEE requirement from the onset.

Icasa’s approval followed the recommendation from the Competition Commission to the Competition Tribunal that the merger be approved, but with conditions.

The Competition Commission has its own conditions for the deal, which included a limitation on the use of Neotel’s spectrum by Vodacom.

  • It recommended that Vodacom shall not directly or indirectly use Neotel’s spectrum for a period of two years from the approval date.
  • It also requires Vodacom to commit to a R10-billion investment in fixed network, data, and connectivity infrastructure.
  • It also has a BEE requirement, where Vodacom must, within a period of 24 months following the approval date, ensure that the value of shares in its share capital held by black economic empowerment shareholders in Neotel increase by an amount of R1.4 billion.

More on Vodacom/Neotel

Commission rules on spectrum in Vodacom/Neotel merger approval

Vodacom-Neotel Icasa approval raises eyebrows

Vodacom-Neotel deal gets approval

Vodacom disappointed by Neotel wait

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Telkom heads to court over Vodacom-Neotel deal