BCX terms not onerous: Telkom - TechCentral

BCX terms not onerous: Telkom

Sipho Maseko

Sipho Maseko

The terms that the Competition Tribunal has imposed on Telkom and Business Connexion (BCX) over their impending merger are not an “undue burden” and the parties are happy to accept them, Telkom CEO Sipho Maseko said at a press conference on Wednesday.

On Tuesday, the Competition Tribunal said it had decided to approve Telkom’s R2,7bn acquisition of BCX, but had attached conditions to the deal.

“It’s okay for the regulator to ask for these things,” Maseko said. “The journey we are on, in another five years, the company will look totally different. It probably won’t even be necessary to have conditions of this nature for transactions like this.”

Maseko explained that the parties have agreed to extend a previous settlement agreement reached with the commission by two years, from 2018 to 2020.

This agreement was related to previous charges of anticompetitive behaviour brought against Telkom by Internet service providers and other industry players.

In addition to this, Telkom has agreed not to increase the prices of certain products, namely Diginet and MetroClear services. But Maseko said this requirement is “not a big deal” for Telkom.

A further restraint involves transfer pricing, the setting of prices for services sold between related legal entities within Telkom. Maseko said Telkom is already far down the line in addressing issues in this area through its previous agreement with the Competition Commission.

Isaac Mophatlane

Isaac Mophatlane

“We began to implement this 12 to 18 months ago, so the conditions imposed on us are not onerous because they’re part of the journey we are traversing anyway.”

Lastly, BCX may retrench a maximum of 60 staff over the next three years, or 20 people per year.

BCX CEO Isaac Mophatlane said he doesn’t expect the company to retrench that many staff because of skills shortages.

Maseko said the parties hope to consummate the deal on 1 September, after they have received approval from the Takeover Regulation Panel and the JSE.  – © 2015 NewsCentral Media

3 Comments

  1. Concerned??? on

    So wait a minute, as part of the deal BCX may not retrench more than 60 people over the next three years. Telkom is paying R2.7bn for this company with it’s 6000 plus employees and yet they want to cut their own staff numbers by over 4000 people, implement a wage freeze, shorter working hours??? Is the current Telkom staff then paying for the BCX takeover with their very own livelihoods?

  2. No with taxpayers money and without Treasury approval as usual and so easily forgotten MultiLinks and IWay. Numberplates and all, the Regulator

  3. Greg Mahlknecht on

    That retrenchment clause is meaningless – just “encourage” employees to resign voluntarily – Telkom have a lot experience with this 🙂

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