Merger talk - Cell C and 8ta link 'could challenge heavyweights'
PARLIAMENT'S communications watchdog is buoyant about speculation regarding a merger between mobile operators 8ta and Cell C.
Reacting positively to the news, the chairman of Parliament's portfolio committee on communications, Eric Kholwane, said a merger would likely give the two companies enough muscle to tackle the industry's dominant forces - Vodacom and MTN.
"The idea makes sense because Vodacom and MTN have become too big, such that they are now monopolising the industry," he said.
Kholwane, however, could not confirm whether the speculation was factually accurate.
"I will talk to Telkom chief executive Pinky Moholi either this or next week," he said.
Should the merger happen, 8ta, a subsidiary of Telkom, will bring about 1.14-million subscribers and Cell C about 8.2-million to the table, according to the two companies' lastest annual results.
Kholwane said the merger would not have been necessary had the Independent Communications Authority of SA not failed to come up with innovative ways to help new players in the industry.
"We can't implement a free market system in an industry where competing companies are not similar in size," Kholwane said.
Cell C chief executive Alan Knott-Craig said a merger between the industry's lightweights was unavoidable.
"Consolidation will help smaller operators compete more effectively with larger players and it is only then that customers will benefit from tariff reductions, network availability and quality of service," Knott-Craig said in a statement.
"In my view, there will be some form of consolidation or partnership in the industry in the near future.
"However, any decisions on consolidation or future partnerships involving Cell C would be for our shareholders to decide upon."
Pynee Chetty, Telkom's spokesperson, said the company had not held formal discussions with Cell C. - email@example.com