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- Telkom has asked the Competition Court to declare the spectrum agreements between Vodacom and Rain a merger.
- You want the competition authorities to examine your relationship.
- While the details are not public, their deal is reported to include Rain gaining access to Vodacom’s tower sites to build its network infrastructure, while Vodacom takes advantage of the valuable radio frequency spectrum assigned to Rain.
- For more articles, go to www.businessinsider.co.za.
Telkom claims that its competitors Vodacom and Rain have effectively merged, given their agreements to share infrastructure.
On Wednesday, Telkom asked the Competition Court to declare the spectrum deals between Vodacom and Rain a merger, which should have been reported in terms of the Competition Law.
Telkom says that a series of agreements between Vodacom and Rain “give Vodacom the use of and control over the deployment of Rain’s spectrum, including the planning, deployment, maintenance and service of its radio access network.” It considers that this constitutes a merger and should be subject to scrutiny by the competition authorities.
While the details of the deal between the two companies are not public, competitors have complained bitterly about the deal between Vodacom and Rain, which allegedly includes the smaller operator gaining access to Vodacom’s tower sites to build its infrastructure of network, while Vodacom reaches the piggy bank. back on the valuable radio spectrum assigned to Rain.
At a hearing, Cell C said it estimated that access to Rain’s spectrum would provide Vodacom with a profit of R11.5 billion by 2020.
Last year, Business Insider reported that Vodacom spent more than R2 billion in capital in terms of a controversial roaming deal with Rain.
According to Telkom Executive for Regulatory Affairs and Government Relations, Dr. Siyabonga Mahlangu, Vodacom’s ability to control Rain’s spectrum strengthens its position as a dominant player in a highly concentrated market.
“It is important that the effects of spectrum agreements on competition are analyzed,” says Mahlangu. “In particular, in light of the upcoming spectrum auction that will set the stage for the nature of competition in the mobile market for the foreseeable future.”
Business Insider SA has reached out to Vodacom and Rain for their response to Telkom’s request, and the article will be updated with their reactions.
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