MTN and Telkom South Africa have abandoned their planned mobile network partnership after the Competition Commission opposed the deal.
The two telcos had been negotiating a deal that would have seen MTN acquire certain radio access network (RAN) assets from Telkom and take over the financial and operational management of the latter’s mobile infrastructure. The companies also planned to establish bilateral roaming.
The aim was to help both operators compete more aggressively with Vodacom; however, the Competition Commission sees it differently.
"The Commission found that the proposed transaction is likely to substantially prevent or lessen competition in the mobile services market," the regulator said in a statement on Monday, adding that the tie-up would give MTN an unfair advantage, while hampering Telkom’s ability to compete.
The deal "is likely to entrench a duopolistic market structure dominated by Vodacom and MTN," the watchdog said.
"Telkom and MTN have agreed not to proceed with the transaction, as we wish to avoid a p rotracted tribunal hearing," said Telkom group CEO Sipho Maseko.
Despite the setback, he insisted that his company will still be able to compete in the mobile market.
"The mobile business will break even in this financial year and we are most encouraged by the stability that has been brought into our mobile environment. As previously communicated we will continue to explore all avenues to further strengthen our mobile business," he said.
