Johannesburg - Vodacom’s proposed takeover of Neotel has attracted its first public objection. The Wireless Access Providers’ Association (Wapa) was “strongly opposed” to the buyout, it said yesterday, citing fears of potential abuse of market dominance by Vodacom.
Wapa chairman Christopher Geerdts said yesterday that history had caused the industry body to be concerned about the potential transaction.
It is rumoured that Vodacom is offering R5 billion. Vodacom confirmed on Monday that it was in exclusive talks with Tata Communications, which controls Midrand-based Neotel, the second fixed-line network operator and converged telecoms service provider.
Geerdts said many of Wapa’s members, which do not include the largest local telecoms operators, enjoyed a good working relationship with Neotel, especially where it concerned the roll-out of fibre-optic cable in the last mile in small and rural towns, referring to the physical section of a telecoms network that reaches the end consumer.
Neotel had been open to collaboration with smaller players, he said.
“What we ask for is wholesale services, which are free, fair, neutral and open. Vodacom provides a true wholesale service of its main network to one customer – Cell C.
“It has not opened up its national network to other providers in spite of requests and even attempts. Cell C is the only network wholesaling its core service,” Geerdts said.
The association also wanted a new strategy for large and small players to co-exist.
In the past, voice service providers that were Wapa members had experienced difficulties in negotiations with large operators over a fee for voice interconnections.
Wapa said the takeover could stifle competition, cut jobs and do little to narrow the digital divide, which it believed should be the country’s top priority regarding broadband access.
“Wapa’s concern is that Vodacom’s influence will dampen these gains achieved, severely limit open wholesale access and set back rather than increase competition and consumer choice,” Geerdts added.
Neotel chief corporate services officer Tracy Cohen said: “We will not comment on the matter currently.”
Vodacom spokesman Richard Boorman referred to the statement published earlier this week in which Vodacom said: “This transaction, if concluded, would stimulate greater competition in the South African fixed telecommunications sector and will accelerate the provision of high-speed data links.”
Vodacom chief executive Shameel Joosub said in the statement that Vodacom would apply significant investment to the combined entity to improve high-speed fixed connectivity to many more businesses and consumers. - Business Report