Small firms back Telkom/BCX deal

By Iain Scott for Telkom

Johannesburg, 27 Jun 2006

Telkom`s proposed acquisition of Business Connexion (BCX) has the potential to benefit small business and individuals in disadvantaged areas, says the SMME Forum.

The organisation is a not-for-profit body representing about 3 500 small, medium and micro enterprises, mainly in townships, peri-urban and rural areas.

The R2.36 billion acquisition is pending the approval of competition authorities, with both the Competition Commission and industry analysts expecting the Competition Commission probe to be a lengthy one owing to expected objections to the merger.

However, SMME Forum president Tebogo Khaas says his organisation supports the deal and is prepared to state its case at any public hearings held by the competition authorities.

"The issue of competition has been abused by some players who have set themselves up as unofficial opposition to Telkom, and who criticise Telkom no matter what it does.

"Some talk about being the champions of consumers, but most are not championing the acceleration of the consumption of ICT in townships. People need to transcend their petty silos and also look at the general good."

Accelerated deployment

The organisation has sent the Competition Commission a letter expressing its support for the deal, stating it sees Telkom`s acquisition of BCX as "one of the potential catalysts to accelerated deployment of affordable ICT for small and medium enterprises (SMEs) and individuals, especially those in previously-disadvantaged areas".

Khaas says the SMME Forum does not want to disclose all its reasons for supporting the deal ahead of any public hearing.

"But generally the transaction, if combined with some of Telkom`s initiatives, for example the R30 billion infrastructure roll-out, presents an opportunity to roll-out ICT into the townships and make it easier for small businesses to have access," he adds.

The forum believes the merger has the potential to make it easier to encourage convergence and so make it easier for small firms to access ICT services.

At present, these businesses go to Telkom for Internet connectivity and are sold the biggest account they can afford, regardless of needs, he says. However, he believes the BCX deal will allow such business to have access to business consultants, who can assess what the business is about and what the needs are.

Increased demand, he adds, is also likely to lead to downward pricing pressure.