The Independent Consumer and Competition Commission (“ICCC”), on 1st April 2019, granted Clearance for Kumul Consolidated Holdings Limited (“KCHL”) to transfer all of its shares in Bemobile Limited (“Bemobile”) to Kumul Telikom Holdings Limited (“KTH”).
ICCC Commissioner and Chief Executive Officer, Paulus Ain said KCHL submitted an application to the ICCC seeking clearance to transfer all of its shares in Bemobile to KTH in November last year.
“The ICCC completed its assessment of KCHL’s application and granted clearance for KCHL to proceed with the proposed transfer after it concluded that the proposed share transfer will not, and will not be likely to, have the effect of substantially lessening competition in the market for the provision of retail mobile voice, SMS and internet services in PNG.”
“The ICCC therefore has given this Clearance for the proposed transfer of shares of KCHL in Bemobile to KTH to proceed.”
The share transfer is to facilitate the decision of the Government of PNG to restructure the State-owned telecommunication enterprises by consolidating Bemobile, PNG DataCo Limited (“DataCo”) and Telikom PNG Limited (“TPNG”) under KTH as the single holding company.
Commissioner Ain added that the share transfer would involve the transfer of shares only and that no assets will be transferred between DataCo, Bemobile and TPNG.
“The restructure would result in TPNG, DataCo and Bemobile becoming wholly owned subsidiaries of KTH. KTH would remain a wholly owned subsidiary of KCHL with KCHL still retaining full control of KTH. However, the directors of KTH would be formally appointed by the National Executive Council.”
Commissioner Ain explained that the ICCC had initially granted clearance to the parties on 26th June 2017. However, the parties were not able to complete the share transfer within the required statutory time limit of 12 months, hence, KCHL submitted this new application.
The ICCC, as part of the clearance process, undertook public consultation on this application inviting interested stakeholders to make submissions and comments on the proposed share transfer.
The ICCC completed its competition assessment and concluded that the proposed share transfer:
- would not cause prices to rise;
- would not remove or reduce the chances of consumers/customers to choose amongst similar products;
- would not reduce or cause harm to growth, innovation and product differentiation of any company in the market;
- would not remove from the market a strong and reliable competitor or company; and
- would not greatly increase or strengthen any vertical integration for any company in the market after the proposed merger.
The proposed share transfer will be pro-competitive where it creates a player that will be stronger financially and operate vigorously to increase its investment in competitive service provision.