Confusion over the distinction between possession and management has muddied the waters at Icasa public hearings into the transaction.
Cell C stated its utility to communications regulator Icasa for the switch of management its community and spectrum licenses to The Pay as you go Firm (TPC) doesn’t signify a “stripping of property” by Blue Label Telecoms as some stakeholders, together with Cell C’s empowerment shareholder CellSAf, have claimed.
Talking at public hearings final week, Wim Trengrove SC, for Cell C, informed a panel of Icasa councillors that the cell operator will proceed to personal the licences, regardless of the switch of management to TPC, which is owned by JSE-listed Blue Label.
“A number of the submissions mirror confusion concerning the nature and function of the applying. CallSAf appear to assume that, if the applying is accepted, the licences themselves can be transferred out of Cell C and that TPC would be the licence holder going ahead. That is inaccurate,” Cell C stated in a written submission to Icasa forward of the hearings.
The appliance to Icasa by Cell C was triggered by TPC’s transfer to extend its stake within the cell operator from 49.53% go 53.57%, which means TPC could have management of Cell C.
Since this implies TPC successfully controls how Cell C will make use of the licences granted to it by Icasa, the regulator has an curiosity in realizing who’s accountable for Cell C – or another firm licensed by Icasa, for that matter. Though the service and community (I-ECS and I-ECNS) licences are additionally vital, it’s the spectrum licence which are most contentious, due to the worth of the spectrum, which runs into billions of rand.
Confusion
If the switch of management is accepted by Icasa, the title of the spectrum licence holder (Cell C) won’t change, solely the names of the shareholders. This additionally signifies that from an accounting perspective, the spectrum property owned by Cell C will proceed to take a seat on Cell C’s books and never these of TPC or Blue Label.
The confusion concerning the distinction between possession and management of communications licences has raised attention-grabbing questions, with essentially the most pertinent being why Icasa desires to control who controls spectrum licences, no matter who owns them. The reply has quite a bit to do with stopping anticompetitive behaviour by way of spectrum monopolisation.
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The state of affairs is greatest clarified by instance. Previous to 2009, Telkom owned a 50% stake in Vodacom. Say, for instance’s sake, that the identical was true at this time, with Telkom additionally wholly proudly owning its personal cell operator, Telkom Cellular. If Telkom then, in the identical manner TPC is doing, determined to extend its stake in Vodacom (and have become controlling shareholder), it might successfully management Telkom Cellular’s spectrum licences in addition to these of Vodacom, thereby monopolising, or at the least consolidating, the telecoms market by way of spectrum acquisition. This a good portion of why realizing who’s accountable for spectrum licenses is vital to Icasa.
Comparable issues about anticompetitive behaviour had been raised on the public hearings. Each MTN and Vodacom voiced issues that by buying a controlling curiosity in Cell C, The Pay as you go Firm may very well be incentivised to exhibit preferential behaviour in the direction of Cell C that marginalises the 2 bigger operators within the pay as you go airtime market.
“MTN has requested that the Icasa tribunal contemplate and check whether or not the proposed merger situations adequately handle the doubtless hostile impacts on competitors of the proposed switch of management of Cell C’s licences. These issues wouldn’t essentially justify refusal of Cell C’s utility however are related to Icasa’s decision-making course of and any situations Icasa could impose ought to it want to approve Cell C’s purposes,” MTN South Africa stated in an announcement.
Trengrove, nevertheless, dismissed these claims, describing the change to Cell C’s share possession as “marginal” and “making no sensible distinction”. He stated such any “bias” by TPC would have existed previous to buying a controlling curiosity in Cell C, but no preferential behaviour has been exhibited by TPC prior to now. He added that Vodacom and MTN’s pay as you go merchandise, by advantage of the 2 operator’s bigger share of the market, signify a good portion of TPC’s income, and it might not be in its personal pursuits to relinquish this revenue by favouring Cell C.
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Trengrove added that the approval by Icasa won’t change how the spectrum utilized by Cell C is deployed. “Cell C will proceed to carry its licences post-transaction and can proceed to supply the licensed companies in accordance with its licensing situations,” stated Trengrove. – © 2024 NewsCentral Media
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