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Commission authorises TeamTalk Telecom acquisition

Commission authorises TeamTalk to acquire Telecom's mobile radio business

Media Release 2000/43

The Commerce Commission today authorised TeamTalk Limited to acquire Telecom New Zealand Limited’s trunked mobile radio (TMR) business, which trades under the name "Fleetlink".


Commission Chair John Belgrave said that the Commission was satisfied that public benefits from the proposal outweigh its detriments to competition by between $6.072 million and $11.301 million over five years.


The Commission concluded that the main benefit from the proposal would be the overall reduction in costs.


The Commission considered possible detriments from losses in efficiency, but concluded that these were not as significant as the benefits.


A business acquisition that would otherwise be prohibited by the Commerce Act can still be authorised on public benefit grounds.


"In this case, we are satisfied that public benefits outweigh detriments to competition," Mr Belgrave said.


Background


The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened in any market.


Parties can apply for a clearance, which will be granted if the Commission is satisfied that dominance is not acquired or strengthened. The Commission declined to clear TeamTalk’s proposal to acquire the Fleetlink business on December 3 last year (Decision 377).


TeamTalk then applied for an authorisation on February 21.


On March 24 the Commission published its draft determination giving its preliminary view that, on information then available, it would authorise the proposal. Interested parties made submissions on the draft determination and a public conference was held on May 3.


The Commission has drawn together information from its investigation, the submissions and the conference to make its final decision.

Media contact: Commerce Act Manager Geoff Thorn

Phone work (04) 498 0958, cellphone 021 661 104


Senior Advisor Communications Vincent Cholewa

Phone work (04) 498 0920


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