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MTN free to grow

By unknown | Jan 09, 2009 | COMMENTS [ 0 ]

Zweli Mokgata

Zweli Mokgata

The Competition Tribunal yesterday approved, without conditions, MTN's acquisition of 69,4percent of Verizon SA, far ahead of schedule.

The tribunal had allocated five days for the hearings into the competition implications of the merger between the mobile operator (MTN) and the Internet service provider (Verizon).

However, following the withdrawal on Wednesday of Altech, the main opponent of the takeover, the tribunal gave the deal the thumbs up on the first day of hearings.

Information technology firm Altech withdrew its opposing intervention after MTN gave it written assurances that it would not hinder competition. Altech and other competitors, such as Internet Solutions, had voiced concerns around bundling, input, customer foreclosure, the removal of an effective upstream infrastructure rival and avoidance of regulation.

Tim Lowry, MTN SA's managing director, expressed his satisfaction with the tribunal's decision. "All regulatory conditions have now been met in order to proceed with the acquisition and MTN expects to complete the transaction soon," he said.

MTN, the biggest cellular phone operator in Africa with 21 operations globally, links up with the company whose parent, Verizon Communications, is the second biggest telecommunication company in the US with one of the most extensive networks in the world.

Verizon Business SA provides telecommunications to corporate customers locally, in Namibia, Botswana, Zambia and Kenya. The deal is worth about R1,4billion and makes MTN one of the largest Internet service providers in the country.

MTN has double the reason to celebrate as it also got the green light from the tribunal on Tuesday to acquire the remaining 59percent of cellular service re-seller I-Talk Cellular in a deal worth over half a billion rand.

"Following on from the recent approval of the I-Talk Cellular acquisition, MTN is, through these deals, enhancing its value proposition, building capacity and broadening its reach," said Lowry.

MTN SA is now poised to increase its dominance of the local mobile market with these deals as well as a 5000km national fibre optic network.


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