Mobile operator Cell C, which is vehemently opposed to Vodacom acquiring rival Neotel’s spectrum assets, has welcomed a Competition Commission statement that the proposed transaction could prove to be anticompetitive.
But the operator has reiterated its view that Neotel’s spectrum ought to be handed back to communications regulator Icasa and that it should not form part of the deal. The company has said that simply preventing Vodacom from using the spectrum for two years is not enough.
“Cell C is pleased that the commission has highlighted the anticompetitive nature of this transaction in its statement and its recognition that it will significantly lessen competition in the mobile market,” said CEO Jose Dos Santos in an e-mail sent to TechCentral.
“Cell C also notes the commission’s recognition that the concentration of spectrum ‘will likely consolidate Vodacom’s dominant position’,” Dos Santos said.
“Cell C fully intends to participate in the next steps as the process heads to the Competition Tribunal as we believe the conditions as set out in the commission’s statement will not fully address the competition concerns the commission has raised,” he said.
In its statement explaining why it’s recommending to the tribunal that the deal be approved with conditions, the commission said: “Vodacom is the market leader in the mobile services market and the additional spectrum from Neotel will result in spectrum concentration effects that will likely consolidate its dominant position.”
It added that Vodacom “will not be constrained by other competitors as they are unlikely to match its offering. These factors taken together will likely lead to reduced choice and higher prices to end customers in the absence of effective constraints on Vodacom.”
Among other things, Vodacom has agreed it will not directly or indirectly use Neotel’s spectrum for offering wholesale or retail mobile services to any of its customers for a period of two years from the approval date or 31 December 2017, whichever comes sooner.
In an interview with CNBC Africa on Wednesday, Dos Santos said the deal will consolidate Vodacom’s position in the market and ultimately lead to higher prices for consumers.
He also disagreed with the commission’s decision to delay Vodacom’s access to Neotel’s spectrum. “What’s the point? Ultimately what they [the commission] are really saying is, ‘Vodacom, go and build your network, invest in the infrastructure, and in two years’ time, you just switch it on.’
“What they are saying to the rest of the industry is, ‘We are going to wait for the policy makers to decide when they are going to issue your spectrum.’ If you take a close look this, the policy makers haven’t made a decision in almost eight years now… What are the chances they are going to get it right in the next two years?” — © 2015 NewsCentral Media