Cell C Limited and Cell C Service Provider Company (Pty) Ltd v Glocell Service Provider (Pty) Ltd (LM314Mar18) [2018] ZACT 74 (27 June 2018)

Cell C Limited and Cell C Service Provider Company (Pty) Ltd v Glocell Service Provider (Pty) Ltd (LM314Mar18) [2018] ZACT 74 (27 June 2018)

The Tribunal found that the proposed transaction would not substantially prevent or lessen competition in any relevant market. The post-merger market share of the merged entity would remain below 15%, with an accretion of only 0.5%, which is insufficient to raise competition concerns. Both horizontal and vertical overlaps were considered, but the vertical relationship between Cell C and GSP would be terminated by the transaction, and typical foreclosure concerns would not arise. The merging parties would continue to face competition from other integrated MNOs such as MTN and Vodacom. Regarding public interest, the retrenchment of employees was found to be a consequence of GSP's decision...

Citation
[2018] ZACT 74
Parties
Applicant: Cell C Limited; Applicant: Cell C Service Provider Company (Pty) Ltd; Respondent: Glocell Service Provider (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
27 June 2018
Case Number
LM314Mar18
Procedural Posture
Merger Application / Approval
Outcome
The proposed transaction is approved unconditionally.
Judges
Andiswa Ndoni, lmraan Valodia, Medi Mokuena
Legal Topics
Merger Control, Vertical Integration, Market Share Analysis, Public Interest Employment
Competition Law Commercial and Corporate Merger Control Vertical Integration Market Share Analysis Public Interest Employment

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Parties

Cell C Limited

Applicant

Cell C Service Provider Company (Pty) Ltd

Applicant

Glocell Service Provider (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Approval

Legal Issues

  1. 1 Whether the proposed acquisition of Glocell Service Provider's post-paid subscriber base by Cell C Service Provider Company would substantially prevent or lessen competition in any relevant market.
  2. 2 Whether the transaction raises public interest concerns, particularly regarding employment impacts.
  3. 3 Whether there are horizontal or vertical overlaps that could result in anti-competitive effects.

Ratio Decidendi

The Tribunal found that the proposed transaction would not substantially prevent or lessen competition in any relevant market. The post-merger market share of the merged entity would remain below 15%, with an accretion of only 0.5%, which is insufficient to raise competition concerns. Both horizontal and vertical overlaps were considered, but the vertical relationship between Cell C and GSP would be terminated by the transaction, and typical foreclosure concerns would not arise. The merging parties would continue to face competition from other integrated MNOs such as MTN and Vodacom. Regarding public interest, the retrenchment of employees was found to be a consequence of GSP's decision...

Court Disposition

The proposed transaction is approved unconditionally.

Orders

  • The merger between Cell C Service Provider Company (Pty) Ltd and the assets of Glocell Service Provider (Pty) Ltd relating to the Cell C post-paid subscriber base is approved without conditions.