Telkom South Africa has reportedly ended discussions with local mobile network operator MTN South Africa after the Competition Commission said it would not support a proposed deal under which MTN would gain access to Telkom’s infrastructure.
As previously reported by CommsUpdate, in February 2015 Telkom disclosed that it was still in discussions with MTN in regards to the potential extension of an existing roaming agreement between the two companies to include bilateral roaming and outsourcing of the operation of its radio access network (RAN) to MTN. Prior to that, in March 2014 Telkom had signed a deal with MTN, under which the latter agreed to take over the deployment and operation of Telkom’s RAN, although both companies at the time said they would ‘retain and enhance [their] competitive differentiation and flexibility’.
Now, according to Reuters, Telkom and MTN have opted to end negotiations on an expanded agreement as a result of the Competition Commission’s opposition to it, with the watchdog having reportedly said that it would ask the Competition Tribunal to block the deal as it was ‘likely to substantially prevent or lessen competition in the mobile services market’. Having argued that the proposed deal could limit the growth of Telkom’s own mobile business, Commissioner Tembinkosi Bonakele was cited as saying in a statement on the matter: ‘I am satisfied with our legal and economic analysis of this proposed merger, and therefore confident that our recommendation to block it is sound. The decision protects competition in telecommunications, a very important market for our economy now and in the future.’