Industry challenges Telkom
The Tribunal hearings follow the negative verdict of the Competition Commission, which recommended the transaction should be prohibited.
The Commission said it believed the merger was likely to "substantially prevent or lessen competition and negatively impact on the public interest… without any efficiencies to outweigh the negative effects".
The Commission also said it considered imposing certain remedies – it sometimes proposes the sale of certain subsidiaries, for example, to lessen the negative impact of a deal – but said there were none that would have the desired effect of restoring competition.
In what might be considered an executive summary of the proceedings that will play out, the merging parties and some opposing parties gave their opening statements to the Tribunal, going over in broad brushstrokes what they would argue as the hearings progressed.
Retains a de facto monopoly
Taking the stand for the merging parties was well-known advocate David Unterhalter, while Mike van der Nest, also senior counsel, spoke for Gadlex; Business Connexion’s empowerment partner. They argue, broadly, that the deal won’t lessen competition.
Advocate Owen Rogers, meanwhile, reiterated the Commission’s position.
Telkom lost its legal monopoly in the telecoms market in May 2002, but many argue that it retains a de facto monopoly because competition has been so slow in the offing.
Industry’s fear is that the deal with Business Connexion will enable it to cross subsidise, cutting out competitors who still need to buy their infrastructure from Telkom.
Arthur Cockrell began arguments on behalf of the Internet Service Providers Association (ISPA) that the deal should be turned down, while Advocate Arnold Subel will make Dimension Data’s case against the deal.
Hearings continue on Tuesday until 12 April, and Business Connexion CEO Peter Watt told Fin24 sister publication Finweek recently that it expected a verdict from around mid-May.
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