The Competition Tribunal on Wednesday morning approved Reunert’s acquisition of ECN Telecommunications without conditions.
The Competition Commission earlier assessed the deal and concluded that it was unlikely to lead to a substantial lessening of competition and recommended the tribunal approve it.
The value of the acquisition has not been disclosed.
Through its subsidiary Nashua Mobile Reunert provides a range of telecoms services. ECN provides inbound and outbound voice-calls and other network and data services.
Reunert and ECN believe the deal will allow the latter to expand its footprint in SA. At the same time, given the fast-shrinking least-cost routing (LCR) market, the acquisition will allow Nashua Mobile to provide fixed-line voice services to its clients.
Nashua Mobile is exposed to LCR, which is coming under threat as the fees mobile operators charge each other to carry calls between their networks come down. LCR operators had taken advantage of arbitrage opportunities that arose when the fees were high.
The deal positions Nashua Mobile more strongly against rivals like Altech Autopage Cellular, whose sister company Altech Technology Concepts has built its own network to bolster the group’s converged telecoms offerings as wholesale call prices come down and competition in the sector intensifies.
Nashua Mobile CEO Andy Baker says he had expected an “unencumbered and positive result” from the tribunal. — Craig Wilson, TechCentral
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