MTN/Telkom cooperation blocked by regulator

MTN and fixed incumbent Telkom have been forced to drop a planned partnership in South Africa’s mobile market, after their proposal was vetoed by the country’s Competition Commission.

The rejection could now make a link-up between Telkom and smaller operator Cell-C more likely.

The fixed line player, which has a small homegrown mobile business, had hoped to extend an existing roaming agreement with MTN to include bilateral roaming and the outsourcing of its mobile network to MTN, which would have also purchased infrastructure from Telkom. And MTN would have access to spectrum from Telkom for the rollout of a 4G network.

The two operators would have maintained separate mobile retail businesses.

However, the deal fell foul of the Competition Commission, which has recommended that the Competition Tribunal block the deal. The Commission said the deal would lessen competition in the mobile services market.

As a result of the commission’s decision, MTN and Telkom “agreed not to proceed with the transaction in its current form”.