MTN opposes Vodacom’s acquisition of Neotel, claims it would harm competition

Africa’s largest mobile telecommunications company, MTN Group Ltd., said it is against Vodacom Group Ltd.’s acquisition of Neotel Pty Ltd. as the deal would give Vodacom dominance in South Africa’s high-speed Internet market.

“Vodacom would be able to create a national LTE network at a time when its competitors are unable to do so,” MTN said in a filing. “This would give Vodacom an unmatchable cost and time-to-market advantage.”

Vodacom, which is a subsidiary of Vodafone Group Plc, is the largest telecommunications company in South Africa. If the company acquires Neotel, MTN argued that its position would be strengthened by Neotel’s wireless spectrum.

Already, South Africa’s telecommunications regulator has approved Vodacom’s 7 billion rand ($517 million) acquisition of Neotel, subject to some conditions. The company has also received provisional antitrust approval. However, the Competition Commission is seeking responses from the company’s rivals.

Cell C, Dimension Data and Telkom have also taken similar court action. Their applications, together with MTN’s will be heard next month.

In Nigeria, its largest market where it had over 62.8 million subscribers by the second quarter of this year, MTN’s shares fell for a second day on Tuesday as the company faces a fine of $5.2 billion slammed on it by the Nigerian Communications Commission (NCC). The penalty is for missing a deadline to disconnect unregistered SIM cards.

NCC expects the country’s largest telco to pay N200,000 (about $1,000) for each of the 5.1 million unregistered sim cards left active beyond the deadline.

MTN is reported to be in talks with the regulator to reduce the fine.