Reunert Ltd v ECN Telecommunications (Pty) Ltd (25/LM/Apr11) [2011] ZACT 44 (5 July 2011)

Reunert Ltd v ECN Telecommunications (Pty) Ltd (25/LM/Apr11) [2011] ZACT 44 (5 July 2011)

The Tribunal found that the proposed merger between Reunert Limited and ECN Telecommunications (Pty) Ltd is unlikely to substantially prevent or lessen competition in the relevant markets. The market for fixed voice services is fragmented, with numerous participants and low combined post-merger market share for the merging parties. The technologies involved—LCR, VoIP, and traditional voice—are now substitutable due to declining interconnection rates, and competitors and customers did not raise any concerns about the transaction. The vertical relationship created by the Wholesale Supply Agreement does not result in foreclosure, as ECN's market share is low and alternatives exist. No public...

Citation
[2011] ZACT 44
Parties
Applicant: Reunert Limited; Respondent: ECN Telecommunications (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
5 July 2011
Case Number
25/LM/Apr11
Procedural Posture
Merger Application / Approval
Outcome
Merger approved without conditions.
Judges
Norman Manoim, Yasmin Carrim, Andreas Wessels
Legal Topics
Merger Control, Fixed Voice Services, Least Cost Routing, Voice Over Internet Protocol, Market Share Analysis, Public Interest
Competition Law Commercial and Corporate Telecoms and Media Merger Control Fixed Voice Services Least Cost Routing Voice Over Internet Protocol Market Share Analysis +1 more

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Parties

Reunert Limited

Applicant

ECN Telecommunications (Pty) Ltd

Respondent

Procedural Posture

Merger Application / Approval

Legal Issues

  1. 1 Whether the proposed merger between Reunert Limited and ECN Telecommunications (Pty) Ltd is likely to substantially prevent or lessen competition in the relevant markets.
  2. 2 Whether the transaction raises any public interest concerns, including employment effects.
  3. 3 Whether the merger would result in input or customer foreclosure or anti-competitive behaviour.

Ratio Decidendi

The Tribunal found that the proposed merger between Reunert Limited and ECN Telecommunications (Pty) Ltd is unlikely to substantially prevent or lessen competition in the relevant markets. The market for fixed voice services is fragmented, with numerous participants and low combined post-merger market share for the merging parties. The technologies involved—LCR, VoIP, and traditional voice—are now substitutable due to declining interconnection rates, and competitors and customers did not raise any concerns about the transaction. The vertical relationship created by the Wholesale Supply Agreement does not result in foreclosure, as ECN's market share is low and alternatives exist. No public...

Court Disposition

Merger approved without conditions.

Orders

  • The proposed merger between Reunert Limited and ECN Telecommunications (Pty) Ltd is approved without conditions.