Mergers, Acquisitions and Financial Results

The Minister of Communications, Ivy Matsepe-Casaburri, has finally announced that the companies which will comprise the SNO will be granted a licence on 17 September.

In her announcement, made during a press briefing in Parliament last week, the minister said that the department was committed to the reduction of telecommunications costs by introducing competition, providing choice, and increasing access to telecommunications infrastructure and services to the public.

The announcement reads: "The first licensing phase was not successful, and a second process was started at the beginning of last year. In his State of the Nation Address this year, the president indicated that we would be finalising the decision on the SNO soon. In my budget speech in June I committed to announcing my decision in August.

"Protracted discussions regarding the SNO have been taking place for some six months, and one of the parties initiated litigation proceedings. Following on-going interaction with all of the stakeholders in the SNO, I applied my mind to the concerns which all the parties raised, and, where appropriate, made some adjustments to my initial proposals. I am now satisfied that I have adequately taken into account their concerns without prejudicing the public interest."

According to the announcement the minister has decided that, on Friday 17 September, a licence will be granted to the Second National Operator (SNO), comprising Nexus Connexion, Transtel, Esitel, WIP Investments Nine, trading as CommuniTel, Two Telecom Consortium, and the remaining un-allocated equity shareholder, to provide public switched telecommunication services in the Republic of South Africa, subject to the following conditions:

* Acceptance of the shareholding and control structure of the SNO;
* Finalisation of and agreement on the business plan;
* Finalisation of the shareholders’ and subscription agreements.

The announcement further reads:
The structure of the SNO will be as follows:
i. A new company, SepCo, will be incorporated, which will hold 51% of the equity share capital of the SNO;
ii. Control of SepCo will be held by a new financial investor, which will have a 51% shareholding in SepCo. WIP Investments Nine (Proprietary) Limited, trading as CommuniTel, and Two Telecom Consortium (Proprietary) Limited will each hold 24,5% of SepCo;
iii. Transtel and Esitel will together hold 30% of the equity share capital of the SNO;
iv. Nexus will hold 19% of the equity share capital of the SNO;
v. The new financial investor will control the board of SepCo;
vi. SepCo will control the board of the SNO.

According to the minister, the Independent Communications Authority of South Africa (Icasa) will now manage the integration of the SNO and the finalisation of the licensing process.

"I will continue with the process of selecting a suitable investor for the un-allocated equity," she said, before thanking Icasa for the part that it had played in the process.

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