Johannesburg - Vodacom has revised its R7 billion acquisition of SA’s second fixed operator so it will now only be buying most of its fixed-line assets and not its licenses.
The company made this announcement on Tuesday morning, but did not indicate whether it would be revising its price downwards.
Vodacom, SA’s largest cellular operator by subscribers, initially bid for Neotel more than a year ago.
The deal, it said at the time, would increase competition against Telkom, which has seen fixed-line penetration decline, and would also fast track its ambitions to roll out fibre to homes and offices.
In its statement, Vodacom says it has now modified the transaction and will buy most of Neotel’s assets related to its fixed-line business as a going concern, but will not be getting its licenses.
Vodacom’s indirect acquisition of Neotel’s licenses, including its spectrum, had been a sticking point among those opposed to the deal as competitors argued this gave Vodacom an unfair advantage over them as the South African government has delayed in freeing up more frequency.
Operators argue they cannot expand access to high-speed broadband without additional frequency.
The modified deal now needs to be decided upon by the Competition Tribunal, and Vodacom says it has filed the necessary papers with the authority.
In July, its lower body - the Competition Commission - recommended the deal go ahead on condition that Vodacom does not cut Neotel jobs and invests R10 billion in the company within five years. In addition, Vodacom would not be allowed to access Neotel’s spectrum for two years.
This followed approval bu the Independent Communications Authority of SA.
Neotel has recently been through turbulent times as its CEO, Sunil Joshi, on Monday resigned with immediate effect after being cleared in a probe that looked into possible tender irregularities.
Joshi was placed on leave earlier this year by the board while it investigated some transactions between Neotel and Homix.
This is the second executive to leave the company following a lengthy probe into the deals between Neotel and Homix after CFO Steven Whiley stepped down, also after being cleared, towards the end of last month.
The tribunal will hear the matter on Thursday.
IOL