South Africa: Vodacom strikes Neotel deal, but faces dominance probe

South Africa’s largest wireless operator, Vodacom, has reportedly struck a deal with local unit Neotel to acquire the company from India-based Tata Communications.

Reports say Vodacom’s acquisition will allow the company to increase its communications offerings through the Internet provider. Vodacom released a statement Monday confirming the deal, made for $675 million.

Specifically, the deal will position Vodacom against Telkom, the nation’s top fixed-line operator, with Internet services.

The transaction remains subject to regulatory clearance; in a separate statement, Tata said it would be working with competition authorities to process the merger as quickly as possible.

Abuse of dominance probe

News of Vodacom’s acquisition coincided with reports that the nation’s Competition Commission will probe the company after smaller rival Cell C filed a complaint that Vodacom is abusing its dominant market position.

Vodacom confirmed that it was the subject of an investigation. Cell C lodged complaints against both Vodacom and MTN in October of last year, report say. Cell C accuses the two of charging excess fees and making exclusionary deals with suppliers.

The Commission declined to confirm whether a probe has been opened into MTN as well.

Full content: Bloomberg and Tech Central

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