Vodacom-Neotel not a done deal: Icasa

·23 May 2014

The Independent Communications Authority of South Africa (Icasa) has weighed in on the recent spate of potential mergers and acquisitions in the South African ICT sector, reminding the companies involved that the deals still need regulatory approval.

There are currently three major network sharing deals and/or acquisitions currently on the cards in the South African ICT sector, namely:

Vodacom’s full acquisition of Neotel for R7 billion;
Telkom’s full acquisition of Business Connexion for R2.7 billion; and
A mobile network-sharing deal between MTN and Telkom.

“While, consolidation is a global phenomenon and anticipated in the market, all such deals may require regulatory approval,” Icasa said.

The authority said that, while operators have been in discussions and some have informed the authority of their intentions, none of the transactions have come before Icasa.

“The Authority is aware of what is currently before the Competition Commission; and in accordance with our institutional arrangements with the Competition Commission we will collaborate – however, that in no way negates the regulatory approvals required from Icasa.”

Icasa also tried to shrug off some of the blame placed on its shoulders, where it has been implied that the reason much of the M&A activity is taking place is due to its delayed allocation of spectrum to industry players.

“Be that as it may, it is equally important to note that in 2011, ICASA attempted to open up the licensing process for high demand spectrum (2.6GHz and 800MHz) by issuing an Invitation To Apply (ITA); and the industry partly opposed this process on the basis of a lack of a policy direction.”

“This process was subsequently deferred pending the finalization of the policy direction.”

Icasa said it will make a detailed comment on the mergers as soon as it has been presented with the substance and details of the deals between the licensees.