2 May 2012

Namibia: Competition Commission Sets Strict Conditions for Mobile Merger

THE Namibia Competition Commission (NaCC) has imposed strict conditions on the proposed merger between Telecom Namibia and Powercom, trading as the country's second mobile operator, Leo.

NaCC secretary Mihe Gaomab last week gave the go-ahead from the watchdog's side provided that Telecom Namibia and MTC get a "separate and independent" shareholding structure by April 24 2014. State-owned Namibia Post and Telecommunications Holdings (NPTH) currently holds all the shares in Telecom Namibia and 66 per cent of the shares in MTC.

The conditions are necessary to ensure fair competition in the market after the merger, Gaomab said.

"The commission was concerned on the extent to which the proposed merger may give rise to the possible collusive or coordinated behaviour of merging parties which holds implications on possible prevention of competition within the sector," he said.

In addition, the NaCC said a director or employee of Telecom Namibia may no longer serve as a director of NPTH. The same applies in the case of MTC.

Gaomab said this is "in the interest of preventing any collusive or coordinated behaviour that would undermine the free and spirited competition for all entities in that sector, including Telecom and MTC".

The NaCC's condition means that Telecom Namibia's managing director, Frans Ndoroma, who is currently also the chief executive officer of NPTH, must resign with "immediate effect". Patience Kangueehi-Kanalelo, the head of legal services at Telecom Namibia and currently NPTH's company secretary, must also follow suit.

Ndoroma yesterday said the Telecom Namibia received the NaCC's ruling last Friday and that they are still studying it. He is still serving in both capacities.

"One doesn't just resign overnight," Ndoroma said.

The Communications Regulatory Authority (Cran) recently issued a service licence to Leo after special permission was granted by Information and Communication Technology Minister Joel Kaapanda.

The Communications Act states that only companies with a majority of Namibian shareholding, qualify for a service licence. Leo is currently under the control of Investec Bank and Nedbank.

Cran must still approve the proposed merger for the deal to go ahead.

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