Vodafone’s patience tested on Neotel deal

Published Mar 27, 2015

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VODAFONE is running out of patience with South African regulators yet to rule on its local unit’s acquisition of Internet provider Neotel, which would expand its high-speed network into businesses and homes.

“We are a little bit bordering the limit here because it’s more than nine months, almost a year, and we don’t see the end of it,” Vodafone chief executive Vittorio Colao said in Johannesburg this week. “We are at the high end of the range.”

Vodacom, 65 percent owned by England-based Vodafone, agreed to buy Neotel from Tata Communications of India in May for R7 billion. Competitors including MTN, Africa’s biggest wireless operator, and Cell C oppose the purchase because they say Vodacom would become too dominant.

Completion of the deal would allow Vodacom to boost its forecast for sales growth, chief executive Shameel Joosub said in January.

Vodacom shares at the close yesterday fell 2.09 percent to R131, giving the company a market value of R195 billion.

“This particular investigation is quite complex and will not be rushed for the sake of expediency,” Hardin Ratshisusu, the acting deputy commissioner of the Competition Commission, said yesterday.

Vodafone had not held talks with the South African government about buying the state’s 13.9 percent stake in Vodacom, Colao said.

The shareholding may be sold to raise funds for power plants needed to stoke economic growth, people familiar with the situation have said. – Bloomberg

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