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Tribunal to decide I-Talk's fate

By unknown | Jan 06, 2009 | COMMENTS [ 0 ]

Zweli Mokgata

Zweli Mokgata

MTN will be hoping for a favourable ruling from the Competition Tribunal today after pursuing I-Talk cellular for nearly a year.

The authority will make its final decision on the cellular operator's proposed acquisition of the remaining 59percent of I-Talk cellular in a deal worth R511million. MTN owns 41percent of I-Talk and hopes to gain firmer control over its distribution channel through the merger.

Dobek Pater, partner at IT research firm Africa Analysis, said: "I don't see any reason why the tribunal would prohibit MTN going forward with the acquisition. MTN already has pre-emptive rights to acquire the balance of the shares."

Over the past several years, the mobile industry has been undergoing widespread consolidation where larger service providers were acquiring smaller re-sellers.

According to Pater, the larger operators such as Vodacom, MTN and Cell C were hoping to reduce costs by eliminating the need to pay commissions to these re-sellers.

Today only Glo-Cell, Nashua Mobile and Altech Autopage Cellular remain as independent mobile re-sellers along with a handful of under-serviced area licensees.

Huge Telecoms, which also made a bid to acquire I-Talk, tried to block the acquisition late last year arguing that it would diminish competition in the industry.


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