Communications regulator Icasa intends imposing a 30% black economic empowerment requirement on Neotel as a condition of allowing Vodacom to buy the company. It may also require Neotel to roll out 25% of any future wireless broadband offerings in underserviced areas.

But the regulator has not set out any timeframes, instead asking interested parties, including industry players, to provide feedback on how long the companies should be given to comply.

According to Thursday’s Government Gazette, Icasa will require that 30% of Neotel’s shares be held by “historically disadvantaged groups”. Vodacom is buying 100% of Neotel’s equity, so any BEE deal will require Vodacom to dilute its equity.

Icasa said it recognises that it “may not be practicable” for Vodacom and Neotel “to comply with the BEE requirement from the onset”.

“Therefore, the authority wishes to determine the reasonable period within which the applicants should be permitted to ensure compliance with the BEE requirement.”

In addition, and “to achieve the developmental goals” of South Africa in relation to broadband, Icasa is “considering the imposition of the condition that at least 25% of any broadband roll-out to be undertaken by Neotel following the implementation of this transaction … be undertaken in underserviced areas”.

These connections must be at least 5Mbit/s in speed, it said.

Icasa said, too, it may conduct an in-depth study into the impact of market consolidation on competition in the telecoms industry. “The authority will consider to undertake such an inquiry in due course,” it said.