Mobile Telephone Networks Holdings (Pty) Ltd v Verizon South Africa (Pty) Ltd (81/LM/Jul08) [2009] ZACT 17; [2009] 1 CPLR 177 (CT) (6 March 2009)

Mobile Telephone Networks Holdings (Pty) Ltd v Verizon South Africa (Pty) Ltd (81/LM/Jul08) [2009] ZACT 17; [2009] 1 CPLR 177 (CT) (6 March 2009)

The Tribunal found that the merger between MTN Holdings and Verizon South Africa is unlikely to lead to a substantial lessening of competition in any relevant market. Post-merger market shares in all affected markets remain below 20%, with the merged entity continuing to face competition from larger incumbents such as Telkom and Internet Solutions, as well as new entrants like Neotel and Vodacom. Regulatory reforms have significantly reduced barriers to entry, with over 500 ECS and ECNS licenses issued, ensuring a multitude of potential competitors. The Tribunal rejected theories of harm based on bundling and foreclosure, noting that such strategies would not be profitable or effective...

Citation
[2009] ZACT 17
Parties
Applicant: Mobile Telephone Networks Holdings (Pty) Ltd; Respondent: Verizon South Africa (Pty) Ltd; Intervening Party: Allied Technologies Limited
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
6 March 2009
Case Number
81/LM/Jul08
Procedural Posture
Large Merger Application / Merger Clearance and Reasons for Decision
Outcome
Merger approved unconditionally; no substantial lessening of competition or public interest concerns found.
Judges
N Manoim, U Bhoola, Y Carrim
Legal Topics
Merger Control, Vertical and Horizontal Effects, Market Definition, Barriers to Entry, Bundling and Foreclosure, Voice Over Internet Protocol
Competition Law Commercial and Corporate Telecoms and Media Merger Control Vertical and Horizontal Effects Market Definition Barriers to Entry Bundling and Foreclosure +1 more

Case Brief

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Parties

Mobile Telephone Networks Holdings (Pty) Ltd

Applicant

Verizon South Africa (Pty) Ltd

Respondent

Allied Technologies Limited

Intervening Party

Procedural Posture

Large Merger Application / Merger Clearance and Reasons for Decision

Legal Issues

  1. 1 Does the proposed merger between MTN Holdings and Verizon South Africa substantially lessen competition in any relevant market?
  2. 2 Will the merger result in anti-competitive vertical or conglomerate effects, such as bundling or foreclosure?
  3. 3 Does the transaction remove a credible potential competitor from the upstream infrastructure market?

Ratio Decidendi

The Tribunal found that the merger between MTN Holdings and Verizon South Africa is unlikely to lead to a substantial lessening of competition in any relevant market. Post-merger market shares in all affected markets remain below 20%, with the merged entity continuing to face competition from larger incumbents such as Telkom and Internet Solutions, as well as new entrants like Neotel and Vodacom. Regulatory reforms have significantly reduced barriers to entry, with over 500 ECS and ECNS licenses issued, ensuring a multitude of potential competitors. The Tribunal rejected theories of harm based on bundling and foreclosure, noting that such strategies would not be profitable or effective...

Court Disposition

Merger approved unconditionally; no substantial lessening of competition or public interest concerns found.

Orders

  • The merger between Mobile Telephone Networks Holdings (Pty) Ltd and Verizon South Africa (Pty) Ltd is approved unconditionally.
  • No conditions are imposed on the approval of the merger.