Telco merger gets OK to proceed

THE merger between Telikom PNG and DataCo has been authorised to proceed by the Independent Consumer and Competition Commission (ICCC).
This was done after determining that benefits to the public and the industry outweighed possible detriments.
Commissioner Paulus Ain said this decision relates to the authorization application which is a statutory process under the ICCC Act.
This allows a business to seek exemption to continue to engage in a business conduct that may otherwise raise competition concerns for the ICCC.
“The authorisation test is that the net benefits to the society must be greater than the detriments likely to result from the conduct subject of an authorisation application, in this case the proposed merger of Telikom and DataCo,” Ain said
“The ICCC may grant authorisation for the applicants to proceed with the merger if it is broadly satisfied that the benefits will result, or will be likely to result, from it will outweigh any detriments to the community.”
Ain said the proposed merger was considered consistent with these requirements and had been conducted by seeking views from industry participants, stakeholders and the public.
The ICCC has concluded that the following benefits would result from the merger:

• Potential for increased price competition and consequent retail price reduction to end users;
• innovation and increased investment in new technology, hence the technical knowledge and skills gained by national employees;
• improved economic activity and efficiency for the parties in the long run; and,
• As a result of more aggressive competition in retail service offerings, there would be greater penetration of higher bandwidth data and voice services into smaller towns and rural locations which are monopolised by Digicel.

Ain said the merger would result in some serious detriments in considerably lessening competition, and waste of public funds if the claimed benefits and efficiencies are not realised.