Vodacom on Monday announced it is holding talks with Neotel with a view to renegotiating the takeover deal the pair brokered 18 months ago.
The move appears to be linked to the regulatory hoops Vodacom will have to jump through in order to take control of Neotel.
Referring shareholders to a statement it published in July detailing the regulatory requirements imposed on the deal, Vodacom said it is in discussions with Neotel shareholders to explore a revised transaction structure.
"The outcome of these discussions will directly impact the extent of the approval being sought from the Competition Tribunal and the scope of the Competition Tribunal hearing," Vodacom said.
"Accordingly, Vodacom South Africa and Neotel have requested that the hearing be postponed," it added.
According to South Africa’s Business Day, the Competition Tribunal hearing was due to open the floor to rival operators opposing the deal on Monday. It will now hold a closes session to enable the various parties in the deal to discuss the situation and to set a new date for the hearing, the news outlet said.
Vodacom agreed to acquire Neotel from India’s Tata Communications for 7 billion rand (€470 million at current exchange rates) in May 2014.
The deal faced opposition from rival players since it brings together South Africa’s largest mobile operator and its second national fixed-line operator, although Neotel has failed to build up a significant share of the fixed-line market since it was licensed in 2005 as an alternative to the incumbent.
Earlier this year the deal got the go-ahead from the regulator, the Independent Communications Authority of South Africa (ICASA), subject to cond itions relating to Black Economic Empowerment and the rollout of broadband infrastructure services.
The Competition Commission then recommended to the Competition Tribunal that the deal be approved subject to some key conditions.
One of those conditions would prevent Vodacom from using Neotel’s spectrum for two years, while another would require Vodacom to invest 10 billion rand (€672 million) in fixed network, data and connectivity infrastructure over five years.
It is unclear at this stage which of the Commission’s proposed conditions Vodacom hopes to address with the revised deal.
