Neotel (Pty) Ltd v Transtel Telecoms Business (14/LM/Jan08) [2008] ZACT 34 (19 May 2008)

Neotel (Pty) Ltd v Transtel Telecoms Business (14/LM/Jan08) [2008] ZACT 34 (19 May 2008)

The Tribunal found that the combined market share of Neotel and Transtel in all relevant markets would not exceed 3%, with Telkom remaining the dominant incumbent. The transaction was unlikely to result in any substantial lessening or prevention of competition. Concerns raised by third parties regarding market access and vertical integration were either unfounded or outside the scope of the merger proceedings. The transaction was consistent with government policy to introduce competition in the fixed line telecommunications sector. There were no public interest issues identified. Accordingly, the merger was approved unconditionally.

Citation
[2008] ZACT 34
Parties
Applicant: Neotel (Pty) Ltd; Respondent: Transtel Telecoms Business
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
19 May 2008
Case Number
14/LM/Jan08
Procedural Posture
Merger Clearance / Final Determination
Outcome
Merger approved unconditionally; no substantial lessening or prevention of competition found.
Judges
N Manoim, M Holden, Y Carrim
Legal Topics
Merger Clearance, Market Definition, Vertical Integration, Public Interest, Telecommunications Regulation
Competition Law Commercial and Corporate Telecoms and Media Merger Clearance Market Definition Vertical Integration Public Interest Telecommunications Regulation

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Parties

Neotel (Pty) Ltd

Applicant

Transtel Telecoms Business

Respondent

Procedural Posture

Merger Clearance / Final Determination

Legal Issues

  1. 1 Whether the proposed merger between Neotel and Transtel Telecoms Business will substantially lessen or prevent competition in any relevant market.
  2. 2 Whether there are any public interest concerns arising from the transaction.
  3. 3 Whether third party concerns regarding market access and vertical integration are substantiated.

Ratio Decidendi

The Tribunal found that the combined market share of Neotel and Transtel in all relevant markets would not exceed 3%, with Telkom remaining the dominant incumbent. The transaction was unlikely to result in any substantial lessening or prevention of competition. Concerns raised by third parties regarding market access and vertical integration were either unfounded or outside the scope of the merger proceedings. The transaction was consistent with government policy to introduce competition in the fixed line telecommunications sector. There were no public interest issues identified. Accordingly, the merger was approved unconditionally.

Court Disposition

Merger approved unconditionally; no substantial lessening or prevention of competition found.

Orders

  • The merger between Neotel (Pty) Ltd and Transtel Telecoms Business is approved unconditionally.
  • No conditions are imposed on the transaction.