Altech changes tack on Verizon
MTN’s R1,4bn bid to acquire the African operations of Verizon became easier when a fierce opponent of the deal belatedly gave up its hard-won right to participate in Competition Tribunal hearings.
The hearings were expected to drag on for five days, largely because hi-tech company Altech had gained permission to present evidence meant to sink the deal. Altech had the right to cross-examine witnesses from MTN and Verizon and to request witnesses of its own, giving it far more power to influence the verdict than it could achieve by merely outlining its objections to the deal.
On Wednesday, the tribunal said Altech had withdrawn its intervention, but gave no reasons for the surprise decision. The only comment Altech made was to say that MTN “has given a number of general undertakings in respect of the way in which it proposes to conduct the Verizon business.
“These undertakings have given Altech satisfactory comfort to address its competition law concerns.”
Acquiescence by the most vocal critic makes it likely that MTN will win permission to complete the deal, particularly since the Competition Commission has already recommended that the move be approved without conditions.
Altech CEO Craig Venter had been a vocal opponent until now, citing “a profound concern” that if MTN took over Verizon it would use its dominance in the voice market to cross-subsidise its internet services unfairly, and become too dominant in the data market.
Altech has a variety of interests in the telecoms sector and is eager to become a voice and data network operator in its own right. Altech was short listed
Despite written objections by several companies, the Competition Commission has declared that it sees no reason to block the deal. Rivals fear that if MTN absorbs Verizon it will eliminate a rival, let MTN avoid some regulations and let it offer combined services that other players cannot match.
The commission believes that rivals will still be able to compete effectively.
MTN declined to comment on how much easier the tribunal process will be now it has gained Altech’s acquiescence.
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