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CFTC inquires into TNM, Burco ISP acquisition

Malonda: We have launched investigations
Malonda: We have launched investigations

Malawi’s Competition and Fair Trading Commission (CFTC) is inquiring into the proposed acquisition of Burco Electronic Systems Limited by mobile telephone services provider TNM.

In a statement issued on Wednesday, CFTC said it has received an application for authorisation of the acquisition of Internet Service Provider (ISP) operations of Burco by Malawi Stock Exchange (MSE)—listed TNM.

TNM offers mobile telecommunication services, mobile internet services, Virtual Private Networks (VPN) services and sells mobile telephone handsets while Burco is a local registered company that provides hardware, software and Internet solutions for business and home users

throughout Malawi, particularly Internet services, VPN, Ewimax and software support services.

CFTC said the proposed transaction will only involve the acquisition of Burco’s ISP business operations while the hardware and other related business operations will be retained.

“In accordance to the Competition and Fair Trading Act, the commission has launched investigations to assess the likely effect of the acquisition on competition in the relevant market,” reads the statement, adding that they are seeking views and comments

from third parties on developments and operation of this industry, particularly on what prospects are likely to emerge in the light of this transaction.

TNM in a statement on Wednesday said acquisition will enable them to establish and deliver a broad range of telecommunications services to their business customers, as well as providing enhanced services to Burco’s existing customers.

“TNM aims to accelerate the growth of ISP services in Malawi which it currently provides to its customers through mobile devices with faster innovation, increased synergies, unified branding and marketing,” said a statement, adding that by acquiring the existing infrastructure from Burco, TNM will prevent duplication and thereby create the opportunity to lower the long term cost of services to customers.

TNM said it planned expenditure for 2014 $25 million, and the acquisition of the Burco assets will only represent a small portion of this investment.

The firm said it will issue a cautionary notice to its shareholders, once a significant level of agreement has been achieved for the proposed transaction.

 

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