• November 16th, 2018
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NPTH says conquest of mobile operators is no monopoly

Front Page News
Front Page News

Desie Heita Windhoek-State-owned Namibia Post and Telecom Holdings (NPTH) is unyielding in its belief that being allowed to wholly own MTC, TN Mobile and Telecom Namibia would not constitute monopoly in the Namibian telecom market. To back up its argument, NPTH points out that not only do the entities have separate boards, but their operations are also kept at an arm’s length. In fact, NPTH reveals that TN Mobile, a subsidiary of Telecom Namibia, has entered into a relationship with MTN Namibia – which is about to enter the Namibian market in coming months - to expand its mobile virtual network operator services. The arrangement between TN Mobile and MTN Namibia would see MTN utilise the network of Telecom Namibia for a three-year period. NPTH contends that the arrangement between MTN and TN Mobile would ensure that TN Mobile grows its mobile subscriptions beyond 50 percent each year for the next three years. NPTH’s argument is that the arrangement would present some serious competition between TN Mobile and MTC and, good news for consumers. NPTH says this in its application for a review of the decision by Namibia Competition Commission (NaCC) to reject the proposed merger with Samba DutchCo B.V, which owns 34 percent in MTC. This is because, NPTH says, analyses have so far shown that growth for any new entrants or competitor in the mobile market depends on enticing existing customers from the existing mobile operators, and not new customers who have not had mobile subscription. The review application is now with the Minister of Industrialisation, Trade and SME Development, Immanuel Ngatjizeko, who has just given the notice for public comment on whether or not to support the decision by the commission. The merger is the easiest way for NPTH to obtain 34 percent shareholding in MTC. However, NaCC rejected the merger, which was initiated by the NPTH, “on grounds that the proposed merger is likely to substantially prevent or lessen competition in the Namibian mobile telephony market.” NaCC says NPTH “is unlikely to have an incentive to push Telecom Namibia and MTC to compete vigorously post-merger.” As such, NPTH would continue to make money, with no financial loss, if there were to be no competition in the telecom market. “Not any benefit to the public [was put forth] that would outweigh any of the envisaged detriment that is likely to result from the proposed merger,” said NaCC. NPTH argues that by assuming control of the 34 percent in MTC, currently held by Samba DutchCo B.V, would eventually lead “towards achieving a greater private sector participation”, when MTC is later publicly listed on the Namibian Stock Exchange (NSX). Cabinet has already approved, in principle, that a portion of MTC shareholding be floated on the stock exchange, and that a substantial investor in the form of Government Institutions Pension Fund (GIPF) be brought on board so government only holds 51 percent in MTC. “NPTH is willing to commit to conditions that may be imposed to ensure that the business of Telecom Namibia/TN Mobile and that of MTC continue to be kept separate as in the past, allowing for TN Mobile to compete with MTC,” says NPTH. Further, NPTH says it is “not averse to an approval” that is subject to reasonable conditions imposed to ensure that the proposed restructuring of MTC to allow for a substantial shareholding by the private sector, and listing on NSX, are complied with within a reasonable timeframe. “In the interim such a local substantial investor could be afforded the right to nominate the majority of the directors on the MTC board, thereby in effect exercising control over MTC until the proposed listing of its shares on the NSX,” suggests the NPTH. NPTH outlines its predicament starting with the nature of the shareholding arrangement, which dictates that MTC’s foreign shareholders with 34 percent appoint the chief executive officer or any other crucial appointments on the executive of MTC. These appointments are for the position of commercial, operational, information technology, financial and administrative executives. Further, the business plan and the annual budget of MTC, and crucial board decisions have to receive approval from the minority shareholder. The NPTH has hoped to bypass this arrangement by either acquiring the shares now held by Samba DutchCo B.V., a subsidiary of Samba Luxco, or through the merger. The government of Namibia owns 66 percent of MTC, via the state-owned NPTH, while the remaining shares belonged to Portugal Telecom through its former African subsidiary Africatel. However, since July 2016 the shares had belonged to Samba Luxco, who was a minority shareholding in Africatel. The company received the shareholding through an asset swap arrangement.
New Era Reporter
2018-02-01 08:57:29 9 months ago

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