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‘Telkom-Infraco deal will hurt competition’

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Telecom experts and cellular companies are worried that the merger between Telkom and Broadband Infraco, the state’s telecoms company, is going to hurt competition.

In addition, there are concerns the merger will be detrimental to consumers because it could lead to higher
call charges.

“Such a merger will only further strengthen Telkom’s communication monopoly of the fixed-line market and will weaken fair competition,” said Arthur Goldstuck, head of internet research company World Wide Worx.

Telkom already owned a massive copper and fibreoptic cable network that was miles ahead of its competitors in terms of infrastructure investment, Goldstuck said.

Telkom’s fibreoptic cable network covers 147 000km and it will get access to a further 14 676km of fibreoptic network belonging to Broadband Infraco if the merger happens.

Telecommunications Minister Siyabonga Cwele last month confirmed Telkom and Broadband Infraco were negotiating “possible collaboration” as part of government’s efforts to restructure and prevent duplication in government departments and state entities.

It was reported this week that Broadband Infraco’s corporate plan establishes the matter as much more than collaboration and entails the merging of the two entities.

The corporate plan determines that all of government’s broadband assets have to be rationalised into a supernational broadband network that is operated by a single company
and supplies internet services to citizens, the business and public sectors.

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