The Competition Tribunal hearings on the proposed acquisition of Business Connexion started on 12 March with Telkom stating the deal is in the best interests of all parties and will benefit the ICT industry.
The tribunal will hear arguments based on three broad issues - the PSTS (public switched telecommunications services), the managed network services (MNS) and the traditional IT services (ITS) markets.
"Our proposed acquisition of BCX is a natural and necessary step in the process of growth and competition. We will continue to seek new ways to serve the needs of the ICT industry," said Mandla Ngcobo, Telkom's Chief of Corporate Affairs.
He added the proposed impact of the merger will not lead to anti-competitive practices with regard to pricing, network access or quality of service. "This is especially the case because the markets, particularly the MNS market, is well-populated with a large number of competitors."
Ngcobo said this is a multi-faceted situation that required in-depth analysis in order to ensure the best interests of the industry are served. "The proposed merger is not only in the interests of our customers and shareholders, but it is also in the national interest," said Ngcobo.
He emphasised that Telkom's proposed acquisition of BCX was fundamental to the upliftment of all strata of the South African society and would have benefits for all. "It would also help to ensure more job opportunities for locally available staff and help retain critical skills in SA," stated Ngcobo.
In its opening statement to the tribunal today, Telkom said competition across all segments of the ICT industry was already a reality. For example, Neotel was already in the market and was continuously announcing the introduction of new services. In the longer-term, Neotel and other possible entrants remain significant competitors. Wireless technology also provided alternative solutions.
In addition, Telkom stated the MNS market and the traditional ITS market are both well-established and diversified with many organisations competing for market share. In the MNS market, this includes Internet Solutions; African players such as Gateway Communications; and international players such as British Telecom, T-Systems and Verizon Business.
Telkom added that it could not impose bundled MNS and ITS solutions on the market as customers have the option of choice with respect to services and suppliers. Customers usually decide whether they require bundled solutions or would prefer a best-of-breed solution based on their business needs. Customers are extremely knowledgeable and sophisticated and are able to discriminate appropriately in selecting a sound solution, stated Telkom.
The hearing resumes at 2pm on 13 March.
Kindly attribute all comment to: Mandla Ncgobo: Chief Corporate Affairs
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