The Competition Commission in South Africa has informed Telkom and MTN that it has not recommended the approval of the proposed radio access network sharing and bilateral roaming deal proposed by Telkom and MTN.
According to the Competition Commission: “The access to additional spectrum capacity by MTN will confer first mover advantages to it relating to network speed, capacity and mobile offerings.”
“MTN would be able to gain a significant competitive and time advantage, offering network and services that cannot be significantly constrained by rivals, particularly given the market position of Cell C and Telkom Mobile,” added the Competition Commission.
In response to the decision, Telkom Group CEO, Sipho Maseko said: “While the Commission’s decision is disappointing, Telkom and MTN have agreed not to proceed with the transaction, as we wish to avoid a protracted Tribunal hearing,”
“Over the past 18 months, our focused efforts to de-risk our mobile business have delivered a mobile division that is viable and sustainable. The mobile business will break even in this financial year and we are most encouraged by the stability that has been brought into our mobile environment. As previously communicated we will continue to explore all avenues to further strengthen our mobile business,” Maseko said.
Graham de Vries, Executive: Corporate Services, Corporate Services Department for MTN stated that: “With disappointment the decision of the Competition Commission to recommend a prohibition of the proposed transaction between MTN and Telkom. As a result of an agreement between MTN and Telkom, MTN cannot pursue this transaction any further.”
“MTN will of course continue to explore other innovative ways of creating value through efficient network consolidation as is happening in other parts of the world,” he concluded.