Acquisition of Neotel ‘will not solve Vodacom’s spectrum needs’

1 Oct 2014

Shameel Joosub, CEO at Vodacom Group, has revealed that although Neotel’s spectrum would give the operator ‘some breathing room’, it would not solve Vodacom’s spectrum needs, BusinessTech reports. The executive however refuted claims that the focus of the Neotel acquisition was to gain access to the operator’s spectrum holdings in the 800MHz and 1800MHz frequency bands, by saying that the deal was more in line with a capital investment strategy: ‘Fixed line is a focus, and Neotel gives us fixed capability… Secondly, we will be acquiring a customer base – effectively capital investments; there is also 16,000km of fibre… There is also spectrum…but even that does not solve our spectrum needs, to be frank. But it does give us some breathing room.’

As previously reported by CommsUpdate, in May 2014 Vodacom agreed to acquire South Africa’s second national operator (SNO) Neotel from its majority-owner Tata Communications of India for ZAR7 billion (USD676 million); the deal is currently open for public comments as part of the Competition Commission (CompCom) approval process. Neotel has 15,000km of fibre-optic cable, including 8,000km of metro fibre in Johannesburg, Cape Town and Durban and is authorised to use 2×12MHz in the 1800MHz band, 2×5MHz in the 800MHz band and 2×28MHz in the 3.5GHz band. Spectrum is a crucial part of Vodacom’s future plans, as competition for provision of next generation mobile broadband services – Long Term Evolution (LTE) and LTE-Advanced (LTE-A) – is heating up. Vodacom, which launched LTE in April 2013, trialled LTE-A technology last week, achieving down/uplink speeds of 270Mbps/40Mbps over the network; the operator used 2×20MHz of spectrum in the 2600MHz frequency band to showcase the technology.

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