Shameel Joosub, Vodacom

Vodacom, which is in the midst of buying Neotel for millions, will only ask authorities for permission to buy out SA’s second national operator once an agreement has been inked.

The permissions it will have to seek include the green light from the Competition Tribunal for the acquisition, and also from the Independent Communications Authority of SA (ICASA) to take over spectrum.

Spokesman Richard Boorman says its submission to the authorities can only be lodged after negotiations are concluded. Vodacom has yet to provide an updated timeline as to when this will be, but due to the complex nature of the deal and the involvement of several parties, this could be weeks or even a few months away.

Vodacom said in September it was in exclusive talks to buy 100% of the company’s shares, confirming what the industry had long suspected. Vodacom wants to buy the operator to add it to its business offering to create an entity with scale that can compete head-on with Telkom in the enterprise segment.

If it succeeds in buying out its smaller counterpart, Vodacom will also gain access to valued spectrum in the 800MHz range - an acquisition that will enable the operator to roll out long-term evolution (LTE) at a time when the rest of the market waits for spectrum allocation.

It will also gain access to thousands of kilometres of fibre.

Using the overlay potential of both fibre networks, Vodacom could push fibre to businesses and housing estates, making on-demand services a possibility, CEO Shameel Joosub" rel=tag>Shameel Joosub has said.

Numbers have yet to be made public, but the deal should be worth more than the R5 billion Bloomberg has stated, citing a source. Neotel has, so far, spent R5.5 billion on its network, at a rate of about R500 million a year.