Vodacom’s broad-based black economic empowerment (BBBEE) credentials may be bolstered by the Public Investment Corporation’s (PIC) plans to sell a sizable portion of its stake in the mobile phone operator to black investors.
The Sunday Times reported that the move may be part of Vodacom’s plans to comply with the industry’s regulator Icasa’s regulation to bid for the scare broadband radio frequency spectrum.
Mobile operators that want to acquire broadband spectrum will need to prove that 30% of their shares are owned by black investors.
On Friday, Mail & Guardian reported that ex-Vodacom executive Romeo Kumalo may be leading a consortium that has approached the PIC to buy the Vodacom stake.
Dan Matjila, PIC’s CEO, told the Sunday Times on Friday that the state-owned fund manager, which owns about 15% stake in Vodacom was ‘quite concerned’ about the mobile phone operator’s BBBEE numbers and that this deal if concluded, was ‘an opportunity for them to fix their house”.
The PIC increased its stake in Vodacom after buying the government’s 13.9% when the state needed money to bail out state-owned energy firm Eskom last year.
Asked to comment on the deal, Vodacom’s spokesman Bryon Kennedy, said “we do not comment on speculation,” but added that the mobile phone operator “is fully supportive of the government’s objectives around transformation.”
In a Government Gazette, published on 11 September 2015, Icasa proposes that spectrum allocation should be conducted via an auction process.
For more read: Spectrum alllocation: a game of chess
The watchdog says it will auction 700MHz, 800MHz and 2.6 GHz bands to enhance competition and to increase broadband coverage. Such a move would bridge the digital divide and remove broadband networks disparities between urban and rural areas.
Icasa favours the auction model adopted in Germany, which it claims led to wireless broadband or Long Term Evolution (LTE) services being available across the country in a period of less than two years.
Icasa is hoping to achieve same impressive results in South Africa. Icasa is also hoping that the auction of spectrum will give expression to the National Development Plan (NDP) that seeks to achieve universal access to broadband by 2030.
