Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      War of words erupts over home affairs database fee hike

      24 June 2025

      Don’t expect Starlink in South Africa anytime soon

      24 June 2025

      Finally! Tribunal unpacks why it blocked Vodacom’s Vumatel deal

      24 June 2025

      Samsung to unveil new folding phones at July event

      24 June 2025

      Capital Appreciation banks on payments to offset software slump

      24 June 2025
    • World

      Mira Murati’s Thinking Machines hits $10-billion valuation

      24 June 2025

      Watch | Starship rocket explodes in setback to Musk’s Mars mission

      19 June 2025

      Trump Mobile dials into politics, profit and patriarchy

      17 June 2025

      Samsung plots health data hub to link users and doctors in real time

      17 June 2025

      Beijing’s chip champions blacklisted by Taiwan

      16 June 2025
    • In-depth

      Meta bets $72-billion on AI – and investors love it

      17 June 2025

      MultiChoice may unbundle SuperSport from DStv

      12 June 2025

      Grok promised bias-free chat. Then came the edits

      2 June 2025

      Digital fortress: We go inside JB5, Teraco’s giant new AI-ready data centre

      30 May 2025

      Sam Altman and Jony Ive’s big bet to out-Apple Apple

      22 May 2025
    • TCS

      TechCentral Nexus S0E3: Behind Takealot’s revenue surge

      23 June 2025

      TCS | South Africa’s Sociable wants to make social media social again

      23 June 2025

      TCS+ | AfriGIS’s Helen Hulett on how tech can help resolve South Africa’s water crisis

      18 June 2025

      TechCentral Nexus S0E2: South Africa’s digital battlefield

      16 June 2025

      TechCentral Nexus S0E1: Starlink, BEE and a new leader at Vodacom

      8 June 2025
    • Opinion

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025

      Singapore soared – why can’t we? Lessons South Africa refuses to learn

      13 June 2025

      South Africa risks being left behind as stablecoins reshape global finance

      6 June 2025

      Beyond the box: why IT distribution depends on real partnerships

      2 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CambriLearn
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » News » Commission blocks Telkom, MTN deal

    Commission blocks Telkom, MTN deal

    By Duncan McLeod17 August 2015
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    base-station-tower-640

    The Competition Commission has recommended to the Competition Tribunal that the proposed radio access network sharing and bilateral roaming deal proposed by Telkom and MTN be prohibited.

    The decision is a huge blow for Telkom and MTN.

    In terms of the proposed deal, MTN and Telkom will conclude a network management services agreement and reciprocal roaming agreements in terms of which MTN will take over financial and operational responsibility for the roll-out and operation of Telkom’s radio access network and each party will be able to roam on the other party’s mobile network.

    “Effectively, MTN will be able to access additional spectrum capacity from Telkom to roll out an LTE network,” the commission said in a statement on Monday.

    “Although the transaction does not involve the combination of MTN’s and Telkom’s mobile retail businesses, the commission found that the proposed transaction is likely to substantially prevent or lessen competition in the mobile services market,” it said.

    “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.”

    The decision comes after the commission recommended that MTN rival Vodacom be allowed to acquire Neotel. The commission recommended that Vodacom not be allowed to use Neotel’s radio frequency spectrum assets to provide mobile services until late 2017.

    The commission, in justifying its decision to want to block the MTN, Telkom deal, said the nature of the transaction is such that Telkom’s ability to aggressively grow in mobile and respond to competition will be “significantly curtailed”. This is because the mobile data capacity available to Telkom will be limited by the agreement between the merging parties whereas MTN’s capacity will not be limited, it said.

    “The commission found that the merger would effectively limit the ability of Telkom Mobile to grow and independently compete against MTN and other mobile operators. This is particularly so in the mobile data markets where future competition is likely to take place.

    “This outcome of this merger transaction is likely to entrench a duopolistic market structure dominated by Vodacom and MTN. Such a resultant duopoly market structure is unlikely to serve customers well, particularly when considering that it is the smaller mobile operators that lower prices before the larger operators, MTN and Vodacom,” the commission added.

    “The merger is also likely to have a significant impact on the structure of the South African mobile markets and future competitive dynamics. This is also a negative effect especially when considering that South Africa experiences higher mobile prices than other comparable countries in the world. There were several objections to the merger received from third parties in the industry.”

    The commission said it had invited MTN and Telkom to provide remedies aimed at addressing the likely competition and public interest harm arising from the transaction. “However, there were no workable remedies identified which would adequately address the harm to competition arising from the transaction.

    “This merger will change the South African mobile industry significantly. We’ve taken due care in our analysis and the recommendation seeks to protect and preserve competition now and in the future. The resultant market structure, especially the limitations imposed upon Telkom Mobile, are not good for competition in the industry as it has been the smaller operators like Telkom Mobile that have been aggressive in disciplining the larger mobile companies.

    “There has not been any workable solution to the concerns raised by the merger, which has left us with no option but to recommend prohibition of the proposed transaction.”  — © 2015 NewsCentral Media



    Competition Commission competition tribunal MTN Telkom
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleInternet censorship bill enters next phase
    Next Article Telkom, MTN walk away from deal

    Related Posts

    Finally! Tribunal unpacks why it blocked Vodacom’s Vumatel deal

    24 June 2025

    Listed: All the MVNOs in South Africa – 2025 edition

    19 June 2025

    MTN CEO edges Vodacom rival in pay stakes – but just barely

    18 June 2025
    Company News

    Communication costs exploding? Telviva has a fix for UK-SA teams

    24 June 2025

    Section 18A deductions and BEE points – a strategic choice for business compliance in 2025

    24 June 2025

    Huawei Watch Fit 4 Series: beauty, brains and a battery that won’t quit

    24 June 2025
    Opinion

    South Africa pioneered drone laws a decade ago – now it must catch up

    17 June 2025

    AI and the future of ICT distribution

    16 June 2025

    Singapore soared – why can’t we? Lessons South Africa refuses to learn

    13 June 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.