‘States should not intervene on Airtel-Vodafone takeover’
THE States’ intervention on Sure’s proposed takeover of Airtel-Vodafone would have set an unneeded precedent and made the deal a matter of political, rather than regulatory, judgment, according to Economic Development vice-president Steve Falla.
The Jersey Competition Regulatory Authority yesterday revealed that it was likely to block the takeover of Airtel by Sure in Jersey, and as a result the Economic Development Committee felt it had to seek to withdraw its plans to bypass normal competition laws.
Deputy Falla voted against his committee’s approach over the merger deal, published last month.
It wanted to implement a regulatory exemption to the 2012 Competition Law, which would have enabled the transaction to take to place even though the Guernsey Competition Regulatory Authority had concerns from a competition perspective.
Deputy Falla said he was not surprised at the JCRA’s decision, but would not now speculate on whether the takeover would be going ahead.
‘I am generally uncomfortable with the States intervening in private, commercial business deals unless absolutely necessary,’ Deputy Falla said.
‘We have a professional, full-time regulator whose job is to weigh up these matters and advise the States.
‘Normally we would rely on the GCRA to deal with a proposed merger after considering whether it would lessen competition in the market.
‘If there is something lacking in the regulatory model then that is what we should be addressing, not setting a precedent by exempting the law.’
He noted that so far there had been no political involvement in the deal in Jersey.
Deputy Falla said he was not surprised by Airtel’s desire to leave the Channel Islands market, but questioned why the States needed to be involved in prescribing the nature of the company’s exit.
The GCRA had raised its concerns about the anti-competitive nature of the takeover, and had told the States that it would be unlikely to be able to approve the transition on competition grounds.
The deal would have see Sure claim 80% market share of the local mobile market if approved.
Economic Development wanted the deal to go ahead, and said it had engaged extensively with the GCRA, arguing that the acquisition would ensure millions in extra investment from Sure that would benefit the island as a whole.
‘Sure is a responsible business and the commitments made by Sure are to be welcomed.
‘But I’m not convinced that the proposed States intervention is necessary for Sure to bring those benefits to the market,’ Deputy Falla said, adding that he would prefer that the views of the GCRA were heeded.
‘I would rather let market forces prevail and dictate the outcome as would be the case with any other private business transaction.
‘The telco providers are responsible businesses with valuable markets and we have put in place a regulator to protect customers.’
