Split Vodacom, says industry body - TechCentral

Split Vodacom, says industry body

Mohammad Patel

Mohammad Patel

Vodacom should be required to separate itself into distinct retail and wholesale arms, similar to the way Telkom has been required to structure itself, if the mobile operator’s proposed R7bn acquisition of Neotel is allowed by regulators to go ahead.

That’s the view of the Wireless Access Providers’ Association (Wapa), which represents about 200 organisations, most of them independent wireless providers. The association was established in 2006 as a not-for-profit industry representative body for the wireless industry.

Wapa chairman Mohammad Patel says many of its members rely on Neotel’s infrastructure to provide services to their customers. The Vodacom acquisition has the potential to threaten that, Patel says.

“We are concerned that Vodacom is becoming extremely powerful. We need to ensure this deal only goes through if Vodacom totally separates wholesale and retail. Then it’s fair.”

Patel says Wapa supports the proposed acquisition in principle. “However, because many Wapa members are buying wholesale services from Neotel, and Vodacom does not really have a wholesale service, we don’t want it interfering in the wholesale services that Neotel is providing Wapa members.”

He says the association’s members are concerned that following the acquisition, Vodacom could force through price increases in Neotel’s wholesale services and stop it from selling certain wholesale products.

“We need to ensure the new entity looks at the wholesale division in a neutral way, separated from retail, and providing the same level of attention as Neotel has in the past,” Patel says.

“Vodacom will have access to Neotel’s infrastructure, and immediately it will be in competition with Neotel’s wholesale clients. Vodacom must also therefore separate its retail/business and wholesale businesses.”

Patel reiterates, however, that Wapa remains positive about the proposed deal. “Neotel has the infrastructure and Vodacom has the financial muscle and together they can benefit South Africa greatly.”  — © 2014 NewsCentral Media

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