Telkom Joins MTN in Voicing Concerns Over Vodacom-Neotel Tie-Up

Telkom SA SOC Ltd. joined opposition to the proposed takeover of Internet provider Neotel Pty Ltd. by South African competitor Vodacom Group Ltd., saying the acquisition could damage competition.

Vodacom, which has the most mobile-phone customers in South Africa, would gain access to Neotel’s spectrum as part of the 7 billion rand ($630 million) deal. The spectrum should instead be taken back by the Independent Communications Authority of South Africa and reallocated, according to Telkom Chief Executive Officer Sipho Maseko.

The deal “must not result in a distortion of the competitive landscape on a number of things, whether it’s access to spectrum or how the spectrum is used,” the CEO of the Pretoria-based landline company said in an interview in Johannesburg today. “Consolidation in the sector is clearly unavoidable.”

Vodacom, which is 65 percent owned by Newbury, England-based Vodafone Group Plc, agreed to buy Neotel from India’s Tata Communications Ltd. in May to expand its network of high-speed fiber-optic cable for businesses and homes. The phone company plans to invest more than 1 billion rand a year in the cable network.

MTN Group Ltd., Africa’s biggest wireless operator, appealed to regulators last week to block the proposed deal.

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