The Namibia Competition Commission has conditionally approved the merger of Leo and Telecom Namibia. Effectively giving the government full ownership of all mobile telecommunication service providers in the country, the commission’s chief executive Mihe Gaomab II announced the decision to approve the merger on Friday. Both Telecom Namibia and MTC are majority-owned by Namibia Post and Telecommunications Holdings (NPTH) and with this merger between Telecom and Leo, NPTH gains full control of the only independent service provider operating in the country. NPTH is wholly-owned by the Namibian government.

Two conditions have been placed on the merger though. From the date of implementation the merging parties should put in place separate and independent shareholding structures for Telecom Namibia and for MTC. This separation of the shareholding structure must be effected within a period of two years, the commission stipulated.
The second condition is that the NPTH Chief Executive Officer, who is also managing director of Telecom Namibia and the NPTH Company Secretary who is also Head of Legal Services with Telecom, should both resign their positions at NPTH with immediate effect. Frans Ndoroma is CEO of Telecom, while Patience Kangueehi-Kanalelo is head of legal services at Telecom. Both are to give up their respective positions with NPTH.
“No person who is a director of Telecom Namibia or an employee of Telecom Namibia may serve as a director of either NPTH or MTC and likewise, no person who is a director of MTC or an employee of MTC may serve as a director of either NPTH or Telecom Namibia,” the commission stipulated.
According to Goamab, the conditions centred around two specific concerns, namely the competitive situation of the post-merger market and the extent of possible collusion or coordinated behavior that would likely prevent or lessen competition.
The commission is concerned about the “possible market foreclosure of the ICT sector on a post-merger basis, especially in the relevant market, which is the mobile telecommunication market. The commission therefore viewed the transaction as provided for in section 46 (2) (a) of the Competition Act as the extent to which the proposed merger would be likely to prevent and or lessen competition in the relevant market,” Goamab said.
He explained that the commission took the view that, “the post merger situation may not be conducive to free and spirited competition in this sector and therefore from the effective date of the implementation of this merger, the merging parties should ensure that they have within the period of two years a separate and independent shareholding structure for Telecom Namibia and that of MTC,” he said.