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ICASA defends Telkom sale of Vodacom shares

April 23, 2009 • Mobile and Telecoms

icasa.jpgThe Independent Communications Authority of South Africa (ICASA) has defended the controversial sale and unbundling of Telkom SA shares in the Vodacom Group to UK based Vodafone.

“The Authority has decided to accept the notification received from Vodacom and not to require Vodacom to seek the Authority’s approval in respect of the transaction. In reaching its decision, the Authority considered the Ownership and Control Regulations, 2002, which remain in effect in terms of section 95(2) of the ECA,” ICASA said in a statement.

Wokers in the South African telecommunications sector are opposed to the move and have taken the government and the companies to court over the transaction. ICASA absolved itself from any wrongdoing.

“The Ownership and Control Regulations indicate that the Authority can only intervene, that is, through an approval process, in a transaction for the transfer of beneficial ownership of shares in a licensee on condition that, amongst other factors, a “control interest” (as defined in the Ownership and Control Regulations) in the licensee has been transferred from one person to another and a market concentration exists,” it said.

“The Authority could not establish that a transfer of control interest has occurred in the transaction or that a market concentration exists in the market in which Vodacom operates in light of the fact that several individual ECS AND ECNS licences have now been issued by the Authority. The Authority is fully aware that any transaction of this magnitude is likely to raise a range of public interest issues. However, the Authority has decided to deal with public interest issues within the context of the existing Ownership and Control Regulations and the Electronic Communications Act.”

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