Vodacom receives approval from communications regulator for Neotel acquisition

Vodacom Group’s ZAR7 billion (US$565 million) offer to buy broadband provider Neotel has been approved by South Africa’s communications regulator.

The Independent Communications Authority of South Africa, which has been deliberating the proposal for about a year, will allow Vodacom to proceed with the deal, the regulator’s chairman Stephen Mncube said. The takeover will be subject to compliance with a local ownership law and adherence to terms of the rollout of broadband infrastructure and services, he said.

Vodacom, 65 per cent owned by Vodafone Group, agreed to buy Neotel from Tata Communications in May 2014. The deal would enable Vodacom to extend Internet services for small-to-medium sized businesses.

Competitors MTN and Cell C have previously said they oppose the purchase because they say Vodacom would become too dominant. South Africa’s Competition Commission has yet to rule on the deal.