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Mobile operator cites ‘regulatory issues’ as it calls off its planned takeover of South African fixed-line player.
Vodacom on Tuesday announced that its planned takeover of Neotel will now not go ahead due to regulatory issues.
The South African mobile operator agreed to acquire Neotel from India’s Tata Communications for 7 billion rand (around €411 million at current exchange rates) as long ago as May 2014.
The deal triggered fierce opposition from rival players and late last year the pair announced they had restructured the transaction to specifically exclude Neotel’s mobile spectrum and to include the offer of roaming rights to all other mobile operators in the country.
However, it seems that was not enough to win the support of the relevant authorities.
"Vodacom South Africa and Neotel have confirmed that the agreement between the parties has lapsed due to regulatory complexities in concluding the transaction as well as certain conditions not being fulfilled," Vodacom revealed on Tuesday.
"Accordingly, the parties have agreed that the proposed restructured transaction can no longer be progressed," it added.
The deal would have given Vodacom access to Neotel’s fixed-line infrastructure in South Africa, something that is becoming a key requirement for mobile players as telecoms markets move increasingly towards converged and bundled services.
The telco advised shareholders that it will continue to invest in the development of its own high-speed infrastructure "to stimulate greater competition in the fixed telecommunications sector and support both its business services offerings and its consumer business."
