Telkom, BCX oppose further delays

Johannesburg, 20 Oct 2006

The Competition Commission`s request for a fourth extension in its investigation into Telkom`s proposed takeover of Business Connexion (BCX) is due to be heard on Monday.

Both Telkom and BCX are opposing the application. On 10 October, the Competition Tribunal granted a third extension to the Competition Commission, which gave it until 17 October to file its recommendations on Telkom`s proposed takeover of BCX.

Telkom`s group executive for corporate communications, Lulu Letlape, says both companies have provided the commission with "all information directly relating to the two companies".

However, she says Telkom`s original deadline for the takeover of 15 December may be compromised as a result of "lack of capacity within the Competition Commission and delays in information expected from third-parties".

"Telkom sincerely hopes the Competition Commission and third-parties are able to meet deadline dates which will allow Telkom to forge ahead with its 2010 business plan. Telkom and Business Connexion will hold talks to discuss strategies for dealing with the current delay, including the possibility of extending the deadline."

However, market commentators do not expect it to reach tribunal-level before the end of the first quarter of next year.

The previous extension was granted because the commission had to replace its lead investigator, third-party information was still outstanding, and the commission had to bring in independent experts.

The deal was initially lodged with the commission on 15 June, when it had 40 days in which to review and refer the matter. It can, however, apply for a series of extensions, which give it an extra 15 days at a time.

Now, the commission has requested the tribunal extend its investigation due to the complicated nature of the transaction and because it is still considering submissions.

The commission, which required independent analysts who understand the nature of the industry, appointed a specialist telecommunications law consultant and a specialist telecommunications economist consultant towards the end of last month. Only 16 business days have expired since the appointment of the first consultant on 22 September.

The commission has also received numerous submissions from the competitors of the merging parties raising serious concerns with the proposed merger, which it is still considering.