COSATU Push Back Against MTN’s Planned Takeover of Telkom

COSATU Push Back Against MTN’s Planned Takeover of Telkom

The Congress of South African Trade Unions (COSATU) has stated that it opposes MTN’s proposed acquisition of Telkom, citing earlier, more significant mergers that resulted in job losses.

The largest trade union in the nation, COSATU, claimed that the merging of big businesses had resulted in thousands of job losses and encouraged anti-competitive and monopolistic behavior, such as price gouging.

Recall that MTN had informed its shareholders that it is in talks for a Telkom takeover on 15th July. The company intends to purchase Telkom’s entire issued share capital in exchange for shares or a cash and share combination.

However, COSATU has now spoken against the takeover, noting that it will adversely affect the telecom industry and South Africa’s economy.

“Telkom, in particular, has seen thousands of jobs shed since it was listed, and highly qualified and experienced workers have been capsulized. South Africa’s data and call charges are already far above the international average and severely impede economic growth and job creation.

“This has a real impact on workers having to pay exorbitant cell phone charges and SMMEs struggling to survive. We cannot afford to see an already monopolistic sector riddled with allegations of collusion, becoming even less competitive.”

ICYMI: MTN is currently the second-largest mobile operator behind Vodacom, with 34.5 million members. In addition, 16.9 million people use Telkom’s mobile service. In mid-morning trade on the JSE, Telkom’s share price increased by more than 25%, while MTN’s share price increased by 1% to R136.26.

Telkom is South Africa’s largest fixed-line operator. The Company has 164,000 kilometers of underground fiber. Through Openserve, the business has connected more than 2.8 million buildings with fiber and has about 10 million mobile subscribers.

The Ouut reported last week that MTN’s imminent Telkom takeover threatens the monopolization of South Africa’s telecom industry. The channel had noted that using numbers to maintain market competition should be the prevailing story in the telecommunications industry today.

According to the union, the proposed takeover involves two businesses in a “particularly concentrated and lucrative sector,” the organization further urged the Competition Commission to intervene. COSATU called on the Competition Commission to be resolute in its resistance to such predatory behavior and take into account earlier accusations of pricing manipulation.

“The Competition Commission must be firm in opposition to such predatory behavior and consider previous price manipulation and other unsavory allegations that have plagued players in the telecommunications sector.

“The government, the PIC, and the Competition Commission need to firmly and clearly come out and oppose this damaging proposal by MTN that has infamously abused its power and domination before.”