Telkom dropped a bombshell on South Africa’s telecommunications industry this week when it said it was approaching the Competition Commission to object to Vodacom’s roaming agreements with Rain. But why?
In this episode of the TechCentral podcast, Telkom group executive for regulatory affairs and government relations Siyabonga Mahlangu explains why the company has decided to fight an earlier decision by the Competition Commission and Icasa that the spectrum arrangements between Vodacom and Rain should not be considered a merger, and therefore not “notifiable” in terms of the Competition Act.
“The Competition Commission took a narrow interpretation of what’s going on. In our view, they focused on the technical integration and they did not look at the economic incentives between the parties… We also believe there was no detailed review of all the ex ante incentives and the mechanics of these arrangements and how they impact on the market structure and the dynamics of competition in the mobile sector,” Mahlangu said.
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Asked why Telkom is approaching the tribunal now given that the commission and Icasa originally sanctioned the arrangement between Vodacom and Rain back in 2018, he said: “We have been engaging with both authorities without stopping since then… We have been pleading with them to reconsider this…”
Mahlangu said the issue is not whether Vodacom and Rain should be allowed to reach the agreements they have but rather whether they should be required to go through merger control regulations.
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“This is Rain giving control of its spectrum and its radio-access network to a dominant operator. The only way in this country that kind of transaction would be regulated is through the Competition Act,” he said.
“The effect of these contractual arrangements is that they have committed Rain’s productive capacity to serve Vodacom’s needs over an extended period with an impact on the market structure and the dynamics of competition.”
Watch or listen to the podcast for more on Telkom’s view on the Vodacom and Rain arrangement as well as similar roaming arrangements that Vodacom and MTN reached with Liquid Telecoms for the deployment of 5G and 4G/LTE infrastructure respectively.
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