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Telkom reports Vodacom and Rain, says their spectrum agreement in fact a merger

14 October 2020 7:47 PM
Tags:
Rain
Telkom
The Money Show
Vodacom
Bruce Whitfield
Competition Commission
Broadband
Competition Tribunal
spectrum
spectrum deal
telecoms
mobile and telecommunications industry

Telkom is approaching the Competition Tribunal. The outcome is likely to set a precedent says telecoms analyst Dobek Pater.

Telkom has approached the Competition Tribunal over the spectrum deal between mobile operator Vodacom and broadband service provider Rain.

It says their "multiple agreements" in fact constitute a merger that should have been notifiable in terms of the Competition Act.

Vodacom’s ability to control Rain’s spectrum entrenches its position as a dominant player in a highly concentrated market.

Siyabonga Mahlangu, Group Executive for Regulatory Affairs and Government Relations - Telkom

Bruce Whitfield gets comment from telecoms analyst Dobek Pater (Africa Analysis).

Pater points out that the details of the agreement between Vodacom and Rain are not public.

However as I understand it, there are two mini-facets to it. One is that Rain can use Vodacom's towers; let's call it the passive infrastructure... the properties to build its own active network using the spectrum that it owns or is licensed to use...

Dobek Pater, Telecoms analyst - Africa Analysis

Secondly, Vodacom can also use Rain's spectrum to build out its 4G infrastructure for instance, its 4G network, and Rain can also use that.

Dobek Pater, Telecoms analyst - Africa Analysis

So Rain in fact benefits from Vodacom towers... It also benefits from Vodacom investing in actually building the radio network which Rain can then also use... or vice versa...

Dobek Pater, Telecoms analyst - Africa Analysis

The arrangement is not unique as such says Pater, although there are still some grey areas.

He points out that Telkom itself tried a similar arrangement with MTN a number years ago and was cut short by the Competition Commission.

In fact the whole mobile and telecommunications industry has been heading in the direction of greater infrastructure sharing...

Dobek Pater, Telecoms analyst - Africa Analysis

It's not all that unusual, but there is a bit of a grey area because spectrum and on-selling of spectrum is not at this point sanctioned through policy regulation and legislation in South Africa.

Dobek Pater, Telecoms analyst - Africa Analysis

Recent changes have made room for operators to sub-lease spectrum, but it's not legally sanctioned yet he explains.

For more detail, listen to the interview on The Money Show:


This article first appeared on 702 : Telkom reports Vodacom and Rain, says their spectrum agreement in fact a merger


14 October 2020 7:47 PM
Tags:
Rain
Telkom
The Money Show
Vodacom
Bruce Whitfield
Competition Commission
Broadband
Competition Tribunal
spectrum
spectrum deal
telecoms
mobile and telecommunications industry

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