The Independent Communications Authority of SA (Icasa) has approved the transfer of Cell C’s spectrum and network licences to Blue Label Telecoms.
The licences, which will remain under Cell C’s name, will now fall under the control of The Prepaid Company (TPC), a wholly owned subsidiary of Blue Label, the company said in a statement on Friday. The transaction will see Blue Label increase its stake in Cell C to 53.57%, giving it majority ownership.
“Though the licences will continue to be held by Cell C, Icasa’s approval to transfer control of Cell C’s licences was required because a transfer of control would be deemed to occur when the shareholding held by The Prepaid Company, exceeds 50% of the issued share capital in Cell C. This approval represents a significant milestone for Blue Label and a crucial step in advancing its strategy to obtain control over Cell C,” Blue Label said.
MTN SA, one of Cell C’s largest competitors, has flagged potential competition concerns and called for a comprehensive evaluation of the deal.
“MTN has requested that the tribunal consider and test whether the proposed merger conditions adequately address the potentially adverse impacts on competition of the proposed transfer of control of Cell C’s licences. These considerations would not necessarily justify refusal of Cell C’s application but are relevant to Icasa’s decision-making process and any conditions Icasa may impose should it wish to approve Cell C’s applications,” it said in a statement.
While MTN acknowledged that the transfer might not warrant outright rejection, it urged the regulator to ensure that any approval is subject to conditions that protect market competitiveness.
For MTN, the approval raises questions about existing pooling arrangements between the company and Cell C, which were previously approved by Icasa. MTN argued that these agreements are unrelated to this deal and should not influence the decision.
“Within the context of the transaction, MTN also responded to the submissions of Vodacom and Telkom as they relate to the pooling arrangements concluded between Cell C and MTN. MTN takes the view that as these pooling arrangements have already been approved by Icasa and MTN is fully compliant with the approval conditions, they are irrelevant to the TPC and Cell C transaction,” it said.
“MTN remains committed to fostering a competitive environment in the ICT sector and believes that a comprehensive evaluation of the proposed transfer of control is essential. The company will continue its engagement with Icasa and the Competition Tribunal to ensure that the interests of consumers and fair competition are upheld.”
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