Telkom and MTN drop deal

Telkom and MTN will not proceed with their deal where MTN intended to acquire RAN assets of Telkom, in order to avoid a “protracted Competition Tribunal hearing”, said Telkom CEO Sipho Maseko.

This followed a statement from the Competition Commission that it did not recommend the approval of the deal between the two companies.

Telkom and MTN South Africa signed a heads of agreement in 2014 to extend their existing roaming agreement to include bilateral roaming and outsourcing of the operation of Telkom’s radio access network.

The Commission said the transaction between MTN and Telkom would impact the structure of the mobile market in South Africa, and would “prevent or lessen” competition in the mobile services market.

The terms of the proposed deal included:

• MTN will take over financial and operational responsibility for the roll out and operation of Telkom’s RAN.
• Each party will be able to roam on the other party’s mobile network. Effectively, MTN will be able to access additional spectrum capacity from Telkom to roll out a Long Term Evolution (LTE) network.

“MTN notes with disappointment the decision of the Competition Commission,” said Graham de Vries, executive for corporate services at MTN.

“As a result of an agreement between MTN and Telkom, MTN cannot pursue this transaction any further. MTN will continue to explore other ways of creating value through efficient network consolidation,” he said.

Maseko said Telkom would “continue to explore all avenues to further strengthen [its] mobile business”.

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