South Africa’s Vodacom will no longer buy spectrum from Neotel as part of its proposed ZAR7 billion ($500 million) deal to acquire the company, following talks to restructure the tie-up.
Vodacom asked the country’s Competition Tribunal to postpone a hearing into the proposed deal to acquire Neotel in late November, as the two companies revise the terms of the deal.
The company did not explain why the terms of the deal changed but its bid has faced significant opposition, particularly from rivals arguing it should not be allowed to acquire additional spectrum. Vodacom is the country’s largest operator.
In a statement, Vodacom said Neotel, presently majority owned by India’s Tata Communications, will offer a roaming agreement to all mobile operators, instead of selling its licences (including for spectrum) to Vodacom.
“Shareholders are advised that agreement has been reached on a modified transaction in terms of which Vodacom South Africa will acquire inter alia the majority of Neotel’s assets related to its fixed line business as a going concern, excluding, inter alia, Neotel’s licences,” read a statement.
Vodacom said the licences relate to spectrum, network and service licences.
“Contemporaneously, Neotel will offer a roaming agreement to all the mobile network operators, including Vodacom South Africa,” it added.
The companies said they have now submitted the restructured terms to the country’s Competition Tribunal, which is set to be considered by regulators at a pre-hearing on Thursday (10 December).
To get the deal approved initially by South Africa’s competition regulator ICASA, Vodacom said it would not cut any jobs and commit to an $821 million investment within five years.
The Competition Commission, a separate body to the Competition Tribunal, proposed that Vodacom should not get access to Neotel spectrum for two years, but opponents argued this was insufficient.
Vodacom did not comment on whether the proposed price of the deal had changed as a result of the revision.