Icasa lays down conditions for Neotel-Vodacom deal

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Vodacom announced in June that it wants to acquire fixed line broadband company Neotel, but such a transaction would first have to be approved by South Africa’s Independent Communications Authority (Icasa).

Today, Icasa released the conditions for the transfer of control, and invited the public to comment on it within 14 days.

“In order to finalise these conditions, the Authority is embarking on a public consultation process as it is required in accordance with relevant sections of the Electronic Communications Act. All interested parties including Vodacom and Neotel are invited to submit written comments within 14 days,” it said in a statement.

The two conditions set forth by Icasa is that Vodacom will have to establish a time frame for compliance with the BEE requirement; and a reasonable target and timelines for Vodacom to provide broadband to Under Serviced Areas (USA).

Both points are available for public debate.

  • First, the Applicants are required to comply with the requirement for 30% (thirty percent) of the equity ownership for individual licences that are subject to the transfer of control application being held by persons from historically disadvantaged groups (“the BEE Requirement”), as contemplated in section 13(6) read with section 9(2)(b) of the EC Act. The Authority, however, recognises that it may not be practicable for Applicants to comply with the BEE Requirement from the onset. Therefore the Authority wishes to determine the reasonable period within which the Applicants should be permitted to ensure compliance with the BEE Requirement; and
  • Second, the Authority has established that the implementation of the proposed transaction will result in consolidation of spectrum. The Authority recognises that broadband access across the country remains a challenge that needs to be addressed with due speed. The Authority views the implementation of transactions such as the present as offering an opportunity, amongst other initiatives, for the Authority to utilise the regulatory instruments at its disposal to facilitate the attainment of universal service and access to broadband services by all South Africans, with priority being given to rural and under serviced areas (as defined in the Under Serviced Area Regulations, 2011). The Authority therefore intends to impose roll-out obligations in this regard as per the afore-mentioned notice.

“Insofar as the imposition of the BEE Requirement and the Roll–out Condition may necessitate the amendment of the individual licence/s that is the subject of the transfer of control application, this notice shall also be deemed to constitute notice in terms of the Electronic Communications Act,” Icasa concluded.

Charlie Fripp

Charlie Fripp

Charlie started his professional life as a motoring journalist for a community newspaper in Mpumalanga, Charlie explored different journalistic angles since his entry into the fast-paced world of publishing in 2006. While fostering a passion for the arts, Charlie developed a love for technology – both which allowed him to serve as Entertainment and Technology Editor for an online publication. Charlie has since been heavily involved in consumer technology for various websites and publications. He thoroughly enjoys World War II films and cerebral documentaries; aviation; photography and indie music. Oh yes, and he also has a rather strange obsession with collecting coffee mugs from his travels.