Tower companies feel the wrath of Comesa
The Common Market for Eastern and Southern Africa (Comesa) Competition Commission (CCC) has fined Malawi Telecom Towers, Helios Towers Limited and Madagascar Towers SA a combined total of 0.05% of their turnover in the Common Market in the financial year of 2020 for failure to notify the organisation of their proposed acquisition on time.
The CCC said the parties failed to inform the Commission of Helios Towers Limited’s intention to acquire shares in Malawi Towers Limited and Madagascar Towers SA.
Malawi Towers Limited is incorporated in Malawi and is a subsidiary of Airtel Malawi Holdings, a wholly-owned subsidiary of Airtel Africa.
The Commission said article 24 (1) of the Comesa Competition Regulation of 2004 requires a party to a notifiable mergerto notify the Commission in writing as soon as it is practicable but not later than 30 days of the parties decision to merger which, according to the organisation, the three companies failed to do.
The Commission said the Committee Responsible for Initial Determination (CID) observed that the decision to merge was executed on 23 March 2021, being the date the Share Sale and Purchase Agreement for the proposed transaction was signed, but that the proposed merger was only notified to the Commission on 2 July, 2021.
In view of this, the Commission said the CID considered Article 24 (4) of the Regulations which confer jurisdiction upon the Commission to impose penalties where parities to a merger fail to give notice as required by the Regulations.
The primary objective of the penalty, the Commission said, is to deter future violations by the undertakings concerned and other would-be offenders.
The Commission’s Registrar Meti Disasa has since cautioned undertakings operating in the Common Market to comply with all parts of the Regulations especially with respect to anti-competitive conduct as the Commission shall not take lightly any breaches of the regional competition law.
“The fine was the first of a kind for beach of the Regulations. The Commission therefore wishes to remind undertakings in the Common Market to be cautious of the prescribed timeline for notifying mergers in under Articles 24 (1) of the Regulations,” said Disasa.
Madagascar Towers owns telecommunications infrastructure assets that are used mainly by Airtel Madagascar to provide mobile telecommunication services to Airtel Madagascar Plc customers.
In March this year, Airtel Africa sold its 1, 229 tower units in Madagascar and Malawi to Helios Towers for US$108-million.
Additionally, the company also announced that it would sale its towers assets in Chad and Gabon to Helios Towers.