Vodacom agrees to modified Neotel deal

Vodacom Group, the South African unit of Vodafone Group, and Neotel amended the terms of a proposed R7 billion ($481 million) purchase of the internet service provider, with the new deal excluding licenses.

Vodacom agreed to buy most of Neotel’s assets related to its fixed-line business, but this excludes permits for spectrum and electronic communications network services, the Johannesburg-based company said in a statement on Tuesday. Neotel will also offer a roaming arrangement to all mobile-network operators including Vodacom South Africa, the Vodafone unit said.

Vodacom said on November 23 it was in talks about restructuring the agreement, announced in May 2014, to buy Neotel from Tata Communications of India. While the purchase was granted provisional approval by the country’s antitrust and communications regulators this year, it was opposed by competitors MTN Group, Cell C and Telkom, which argued the tie-up would give Johannesburg-based Vodacom dominance of South Africa’s high-speed internet market.

The revised transaction documents have been submitted to the Competition Tribunal, which will consider the deal at a prehearing scheduled for December 10, Vodacom said.

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