ISPA clarifies ADSL CompCom, Telkom-BCX issues
Telkom’s possible acquisition of Business Connexion raised concern among many South African ICT companies, scared about the possibility of uncompetitive practices by Telkom after such an acquisition. ISPA has made its intentions clear; they are going to pull out all the stops to try and prevent Telkom’s (TKG) proposed acquisition of a controlling stake in Business Connexion (BCX).
After complaints by ISPA and some other parties the Competition Commission recommended to the Competition Tribunal that Telkom’s proposed acquisition of BCX be prohibited.
ISPA feels that this new acquisition will give Telkom, which has a reputation of cross subsidization and unfair practices, an unfair advantage that may result in higher charges for services.
"Protecting the individual Internet consumer is as important to ISPA as serving the interests of its members. The South African consumer will be top of mind as ISPA continues its opposition to Telkom’s proposed acquisition," said Ant Brooks, the ISPA spokesperson.
Telkom is however not taking the proposed blocking of the BCX acquisition lying down, and said that it feels it has a strong case and will push for the acquisition to go ahead.
Funding
ISPA said that a significant amount of funds are necessary to launch these complaints, and ISPA members were asked to contribute to these funds.
ISPA approached some of its larger individual members for funding, and asked its members to contribute between R 350-00 (small members) and R 6100-00 (large members).
ISPA’s large members include Internet Solutions, Sentech, VerizonBusiness, DataPro, MTN Network Solutions, MWeb and Storm.
Some smaller ISPs unhappy
Some of the smaller ISPs are not entirely happy about the situation. While the funding required of them is not very much, they feel that the Telkom-BCX case is enjoying preference over the Competition Commission complaint submitted late in 2005 which deals with ADSL related issues.
According to these smaller ISPs it appears that ISPA is more interested in the Telkom-BCX case as it directly threatens the business of their larger members. It is felt that the complaint relating to ADSL, which is of more interest to smaller members, are not enjoying the same urgency.
ISPA clarifies
Brooks said he is surprised by the unhappiness from some of its smaller members as the whole process was transparent and all their members were consulted about the investment.
Brooks said that they received great support for the BCX-Telkom merger opposition and received only two complaints from members.
Brooks made it clear that the Competition Commission complaint does not enjoy less priority, but that the Competition Commission process for mergers and acquisitions are merely different which may give that impression that it is more of a priority to ISPA.
According to Brooks the 2005 complaint is a slower process and another 6 month extension has been given to the Competition Commission to conclude their investigation. He said that ISPA met with the Competition Commission on the 15th of December 2006, but there is not much ISPA can do to speed up the process.
Brooks added that the funding for these two complaints is very similar and it is merely because the 2005 complaint depleted the ISPA funds which necessitated special fundraising for the Telkom-BCX case.
While there are no clear guidelines as to when exactly a ruling on the Telkom-BCX acquisition will be made, ISPA said it will be surprised if it is not concluded within the next six months.
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