South Africa's Vodacom drops Neotel deal on regulatory hurdles

A shopper walks past a Vodacom shop in Johannesburg February 4, 2015. REUTERS/Siphiwe Sibeko

South Africa mobile operator Vodacom on Monday dropped a planned acquisition of local fixed line operator Neotel, citing regulatory complexities.

“It is disappointing that we have reached this conclusion despite all our efforts to find a way to deal with the complexities of the restructured transaction,” said Vodacom Chief Executive Shameel Joosub.

Vodacom, a unit of Britain’s Vodafone, had offered $500 million to Neotel owner, India’s Tata Communications, in 2014 but was forced to rework it after regulators raised anti-trust issues.

Under the modified deal, announced in December, Vodacom would have bought assets related to Neotel’s fixed-line business but not its frequency spectrum – which the Competition Commission’s said would have given Vodacom an unfair advantage in rolling out a high-speed 4G network.

South Africa is in the midst of switching its television signal to digital from analogue, a move that would free up much-needed airwaves as consumers increasingly use smartphones to browse the internet and download applications.

Source: Business & Financial News, Breaking US & International News | Reuters.com

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