Vodacom Pty Ltd / GSM and Vodacom Pty Ltd / Teljoy Holdings Ltd (10/LM/Nov99) [1999] ZACT 2 (4 November 1999)

Vodacom Pty Ltd / GSM and Vodacom Pty Ltd / Teljoy Holdings Ltd (10/LM/Nov99) [1999] ZACT 2 (4 November 1999)

The Tribunal found that the mergers between Vodacom and its service providers GSM and Teljoy do not raise competition concerns, whether assessed separately or together. The traditional service provider market has been fundamentally altered by the advent of prepaid services, reducing the competitive significance of service providers. The consolidation under Vodacom's control does not affect consumer pricing, as tariffs are regulated, nor does it foreclose access to competitors, since GSM and Teljoy were already exclusive suppliers to Vodacom. No objections were raised by potential competitors or the sector regulator, and the only concern expressed related to retail exclusivity agreements,...

Citation
[1999] ZACT 2
Parties
Applicant: Vodacom Pty Ltd; Respondent: GSM; Respondent: Teljoy Holdings Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
4 November 1999
Case Number
10/LM/Nov99
Procedural Posture
Large Merger Review / Decision
Outcome
The mergers are approved unconditionally.
Judges
N.M. Manoim, D.H. Lewis, P.E. Maponya
Legal Topics
Horizontal Merger, Vertical Merger, Retail Exclusivity, Market Definition, Barriers to Entry
Competition Law Commercial and Corporate Horizontal Merger Vertical Merger Retail Exclusivity Market Definition Barriers to Entry

Case Brief

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Parties

Vodacom Pty Ltd

Applicant

GSM

Respondent

Teljoy Holdings Ltd

Respondent

Procedural Posture

Large Merger Review / Decision

Legal Issues

  1. 1 Whether the proposed mergers between Vodacom and its service providers GSM and Teljoy raise competition concerns in the cellular communications industry.
  2. 2 Whether the mergers would result in horizontal or vertical foreclosure or raise barriers to entry for potential competitors.
  3. 3 Whether exclusivity agreements in retail distribution could have anti-competitive effects.

Ratio Decidendi

The Tribunal found that the mergers between Vodacom and its service providers GSM and Teljoy do not raise competition concerns, whether assessed separately or together. The traditional service provider market has been fundamentally altered by the advent of prepaid services, reducing the competitive significance of service providers. The consolidation under Vodacom's control does not affect consumer pricing, as tariffs are regulated, nor does it foreclose access to competitors, since GSM and Teljoy were already exclusive suppliers to Vodacom. No objections were raised by potential competitors or the sector regulator, and the only concern expressed related to retail exclusivity agreements,...

Court Disposition

The mergers are approved unconditionally.

Orders

  • The large mergers between Vodacom Pty Ltd and GSM, and Vodacom Pty Ltd and Teljoy Holdings Ltd, are approved without conditions.