/ 8 January 2009

MTN ‘confident’ merger won’t smother competition

Cellphone operator MTN said on Thursday that its acquisition of Verizon SA won’t thwart competition.

MTN is now much closer to sealing the R1,4-billion acquisition of 69,4% of Verizon SA after Altech — which initially opposed the deal — withdrew its hard-won intervention in the hearings.

“MTN continues to be confident that the proposed merger will not reduce nor prevent competition in the markets in which MTN and Verizon SA operate,” the company said.

It added that it has agreed to Altech’s request that MTN confirm in writing its intention to continue to treat MTN Network Solutions and Verizon SA on an equivalent basis to other industry players.

Altech and other competitors such as Internet Solutions — a unit of Dimension Data — have voiced concerns around bundling, input, customer foreclosure, the removal of an effective upstream infrastructure rival and avoidance of regulation.

The deal, which industry players expected to drag on for months, is expected to be completed within weeks after the Competition Commission passed it on the Competition Tribunal without conditions.

The Competition Tribunal began hearings into the merger on Thursday, and they will continue until January 14.

MTN is set to become the third-largest internet service provider for corporate clients in South Africa, with a market share of about 10% as a result of the acquisition. — I-Net Bridge