The Wireless Access Providers’ Association (Wapa) has come out strongly against any deal by Vodacom to buy Neotel, saying it will stifle competition, lead to job cuts and do little to reduce the “digital divide”.
Earlier this week, Vodacom confirmed that it was in exclusive talks with Neotel to acquire 100% of its equity, but the deal, if it goes ahead, will be subject to regulatory approvals. Reports have suggested the deal’s value could exceed R5bn.
According to Wapa, smaller wireless operators are seizing the gap created in the broadband market, particularly for providing last-mile access. This, it argues, is in line with international trends that have resulted in “considerably more data” being carried on Wi-Fi-type than on 3G and LTE.
Wapa, established in 2006, describes itself as a nonprofit that acts as a voice for independent wireless operators in South Africa.
Wapa chairman Christopher Geerdts says the growth in smaller operators is “good for the customer and good for the country” because it increases competition, creates jobs and drives rural broadband penetration. He says larger operators tend to cut jobs and cherry-pick customers in the most lucrative suburbs and business parks.
The association believes that South Africa needs to build up a complementary strategy where large and small players coexist and play to their strengths. Furthermore, it argues that operators with a national backbone need to provide truly neutral and open wholesale services so as to open the market to competition.
Wapa says many of its members enjoy an excellent relationship with Neotel, which it says has proven that strong, wholesale providers with a commitment to rural roll-out can complement smaller operators with experience in those areas.
“Wapa’s concern is that Vodacom’s influence will dampen these gains achieved, severely limiting open wholesale access and setting back rather than increasing competition and consumer choice,” Geerdts says. — (c) 2013 NewsCentral Media