Leo takeover gets conditional approval from comptroller

3 May 2012

The Namibia Competition Commission (NaCC) has issued a decision approving Telecom Namibia’s proposed takeover of cellular operator Powercom (trading as Leo) provided the buyer meets certain conditions aimed at ensuring fair competition in the market. The NaCC stipulated that the shareholding structure of Telecom Namibia and the country’s mobile market leader Mobile Telecommunications (MTC) must be ‘separate and independent’ within two years (by 24 April 2014). The state investment holding company Namibia Post and Telecommunications Holdings (NPTH) currently owns 100% of Telecom Namibia and a 66% stake in MTC, which is part-owned by Portugal Telecom; if the takeover of Leo goes ahead with existing ownership structures, the government will effectively control the entire mobile sector, in which Telecom is currently the third, and smallest, player. In addition, the NaCC said that no director or employee of Telecom Namibia may serve as a director of NPTH, and that the same applies in the case of MTC, ‘in the interest of preventing any collusive or coordinated behaviour that would undermine the free and spirited competition for all entities in that sector.’ As reported by AllAfrica, Telecom Namibia’s managing director, Frans Ndoroma, who is also the CEO of NPTH, must resign with immediate effect to comply with this condition, as must the head of legal services at Telecom Namibia, Patience Kangueehi-Kanalelo, who is also NPTH’s company secretary.

The proposed merger still requires approval from the telecoms watchdog, the Communications Regulatory Authority of Namibia (CRAN). Leo is currently owned by UK-registered, southern African investment fund Investec Asset Management and South African banking group Nedbank Group, which purchased the GSM/W-CDMA network operator from Orascom division Telecel Globe in June 2011 in a cashless deal involving the transfer of the cellco’s USD60 million of debt, according to TeleGeography’s GlobalComms Database.