Lawyers for technology group Altech have won the right to grill MTN on its planned R1,4bn acquisition of Verizon, setting the stage for ferocious questioning at the Competition Tribunal. <\/p>\n
Altech is adamant that the proposed deal should be vetoed to stop the cellular giant becoming unfairly dominant in the data market too. The best way for Altech to illustrate the potential effect of the acquisition is to play an active role in the tribunal hearings. It can cross-examine witnesses and access documents relating to the deal. <\/p>\n
On Monday, the tribunal granted Altech permission to participate in the hearings, despite opposition from MTN and Verizon to its direct intervention. The right to participate gives Altech far more power to influence the hearings and the final outcome than it would by merely presenting its own objections to the deal. <\/p>\n
As a participant it can ask the tribunal to summon witnesses of its choice, cross examine everyone, produce expert reports or documents that may influence findings, present arguments and inspect evidence on the merger, subject to confidentiality clauses between MTN and Verizon. Altech can also see the report of the Competition Commission, which has recommended approval of the controversial deal. <\/p>\n
Several companies argued against the deal, voicing concern that MTN would increase its allegedly anticompetitive behav iour by bundling voice and data packages at favourable rates rivals could not compete with. <\/p>\n
Despite their worries, the commission felt rivals could compete, and MTN would not gain an unfair competitive advantage. <\/p>\n
Altech CEO Craig Venter denies fighting the merger because of sour grapes. Altech was short-listed to buy Verizon for itself but MTN outbid it. Venter said he was no longer interested in taking over Verizon’s networking operations in SA and a handful of other Africa countries but was fighting the deal to stop the cellular operator becoming too dominant in another aspect of the industry. <\/p>\n
Venter said MTN already had 23-million voice subscribers, who also had access to its data services. Acquiring Verizon would give it a dramatically larger market share. <\/p>\n
“This deal is anticompetitive and would certainly pave the way for MTN to become dominant in the data space," he said. Its ability to cross-subsidise its voice and internet services “raises a profound concern" about the potential to abuse its dominance in the voice market to unfairly dominate the data market too, he said. <\/p>\n
Internet Solutions CEO Angus MacRobert has also accused MTN of anticompetitive behaviour, saying it would worsen if it expanded into other areas. <\/p>\n
But Internet Solutions decided not to spend time and money fighting the merger. MacRobert said it would probably get permission to go ahead anyway. <\/p>\n
That leaves Altech fighting alone, but the company is already heady from its success in beating Communications Minister Ivy Matsepe-Casaburri in her attempt to stop Altech getting a licence to build its own telecoms network. <\/p>\n
The clashes with the minister and MTN were part of the problems that beset the industry and prevented consumers from enjoying affordable telecommunications services, Venter said. <\/p>\n
It was fighting the issues in an attempt “to secure a level playing field for itself, its consumers and the industry", he said.<\/p>\n