Vula and Thebe in joint bid for cell licence
Rivalry on cellphone turf will be rougher with new player.
Both companies confirmed this week it was likely they would be "joining hands" as three months of discussions had reached an advanced stage.
Vula has already budgeted R6-billion for the building of a cellular network should it secure the licence. Thebe, if it comes aboard as Vula's partner, will be expected to fork out a fair portion of this cost. Arthur Mashiatshidi, CEO of Thebe Media and Communications, said the company's investment would be guided by business needs.
"Investment in the third cellular network is sizeable. We are serious about the bid."
Thebe has completed its business plan and is looking at the investment opportunities as consortiums form to bid for the licence. Mashiatshidi said Thebe was keen on participating to the maximum of its capacity.
He said the company was waiting for the South African Telecommunications Regulatory Authority's findings on the viability of a third player in the cellular market, which is dominated by the Vodacom-MTN duopoly.
Once the authority's findings are released at the end of the month, more consortiums would feel free to move ahead with plans to formalise their shareholding and bid.
"Black empowerment can and should come together. The cellular industry reflects the whole range of society and we would like to see equity participation in the industry that reflects this," said Mashiatshidi.
In establishing the needs of a winning bid, Vula has taken on Sonera, the Finnish equivalent of Telkom, as a foreign partner. Sonera is expected to take an equity stake of between 20% and 30%.
The balance of the Vula-initiated consortium will be modelled on that of Midi Television, the winner of South Africa's first private television broadcasting licence, in which Vula holds 25%.
Other shareholders would consist of no less than 20 black companies, including women's and disabled groups.
The CE of Vula, Mark Headbush, said he had not seen any real competition for the licence yet.
"We do expect to see new empowerment faces once the tender document has been released," said Headbush.
Of the emerging consortiums, one of the more interesting is being led by the yet to be formed telecommunications arm of state-owned arms manufacturer Denel.
Denel has already begun negotiations with black empowerment groups in order to bid for the third cellular licence, and one forerunner for the partnership is the Telecommunications Empowerment Corporation.