CompCom recommends approval of MTN, Afrihost deal

30 Oct 2014

South Africa’s Competition Commission (CompCom) has recommended to the country’s Competition Tribunal the unconditional approval of MTN South Africa’s proposed acquisition of internet service provider (ISP) Afrihost, TechCentral reports. The authority disclosed that no conditions should be imposed on the deal as ‘MTN and Afrihost do not appear to be direct competitors… In both the ADSL and mobile data markets, it is unlikely the merger will give rise to foreclosure effects which are harmful to [small businesses] and residential customers, given the ability of these customers to easily switch mobile data service providers’.

As previously reported by TeleGeography’s CommsUpdate, in June 2014 it emerged that MTN was in the process of acquiring a 50% (plus one share) stake in Afrihost for an undisclosed sum, while existing shareholders, including the company’s management, would retain the remainder. Afrihost, which entered the broadband market in 2009 and acquired rival ISP Axxess DSL in July 2011, is owned by local businessmen Brendan Armstrong, Gian Visser, Greg Payne, Peter Meintjes and Angus MacRobert. In August 2012 it revealed that it would be transferring both companies’ ADSL services from Internet Solutions’ infrastructure to MTN’s custom-built network, in a move which it said will help them to ‘bring the highest quality, best value products to our clients’. Takeover speculation first emerged in August 2013, although MTN refused to comment on the rumours at that time.

South Africa, Afrihost (incl. Axxess), MTN South Africa