Will Business Connexion's chief make it to the tribunal?
The big question at the competition tribunal this week is: "Will Peter Watt be required to make an appearance there or not?"
Watt, the chief executive of Business Connexion (BCX) , was scheduled to give evidence on Monday at the Tribunal's hearing into the proposed merger between Telkom and BCX. He was due to be cross-examined yesterday afternoon. But on Monday he was a no-show.
Telkom's legal team explained to the tribunal that Watt was having considerable difficulty fitting an appearance into his busy schedule.
They have offered to provide the tribunal with an affidavit from Watt, which would set out his views on the merger.
Watt explained to Business Report yesterday that he felt he had little to add to evidence that had already been given to the tribunal by earlier witnesses in support of the proposed transaction.
The offer of an affidavit may or may not satisfy the competition commission, as it will not give the commission or the parties objecting to the transaction any opportunity to cross-examine those views.
If the commission is not satisfied with this situation, it could subpoena Watt to appear before the tribunal.
For Watt, an appearance before the Tribunal could be uncomfortable given the rumoured disagreements about the benefits of the merger within the BCX board.
In the absence of Watt, the hearing continued with evidence from a Dimension Data executive indicating that the acquisition of BCX was part of Telkom's strategy to slow down the development of new technology that would weaken Telkom's overbearing dominance in this industry.
BLACK DIAMONDS Research into South Africa's black middle class seems to back up anecdotal evidence and criticism from trade union Cosatu and others that the rich are benefiting at the expense of the poor.
According to figures from the University of Cape Town's Unilever Institute of Strategic Marketing and TNS Research Surveys, not only are the poor lagging those in the high-income groups, but they were worse off in absolute terms in the first quarter of this year than they were a little more than a year earlier.
The figures show that estimated annual buying power of all black people rose from R300 billion in the last quarter of 2005 to R335 billion. But the buying power of the "black diamonds" was up from R130 billion to only R180 billion. This means the rest of the black population were poorer by R15 billion.
Of course, there are different ways of interpreting the figure.
Brait economist Colen Garrow has pointed out that figures from the SA Advertising Research Foundation show that between 2003 and 2005, about 975 000 consumers moved from living standards measure (LSM) 4 to LSM 7. And 147 000 moved from LSM 8 to LSM 10 - the home of the black diamonds.
If the trend is continuing, the explanation for the Unilever figures may lie in a population shift up the income scale rather than a redistribution of wealth.
The Black Diamond 2007 report is based on a sample of 4 500 people. It shows that an estimated 2.6 million people can now be classified as black diamonds, as opposed to 2 million in 2005.
John Simpson, the director of the Unilever Institute, says black diamonds account for 54 percent of all black buying power. "This compares with 10 percent accounting for 43 percent 15 months ago."
TNS Research Surveys' Nomsa Khanyile, says 1.2 million black diamond adults live in the suburbs (up from 0.45 million in 2005), while 1.4 million (down from 1.55 million) live in the townships.
But this doesn't mean they are turning their backs on the townships, says Simpson. "Even though they live in the suburbs, there remains a strong desire, right across the board, to maintain their township connections."
MANGO vs KULULA The battle of words between SAA's low-cost airline and its rival has heated up again now that the bumper tourism season has drawn to a close and filling planes is getting more difficult.
The two companies seem to have come to the conclusion that slagging each other off in the press is far cheaper than taking out ads and gets their message across more effectively than paid space does.
The latest salvo fired by kulula.com boss Gidon Novick seems to be that although kulula is able to offer low-cost fares, the fact that SAA's Mango does so means that it must be losing bucketloads of cash, and because SAA is owned by the state, this means it is costing taxpayers money. kulula is owned by British Airways/Comair.
Nico Bezuidenhout, the chief executive of Mango, denied this, saying the airline's lower cost base, modelled on successful low-cost carriers overseas, enabled it to offer lower fares on a sustainable basis.
"Mango's aircraft are more fuel efficient and technologically advanced, and give it optimal asset utilisation. Its optimised seating configuration ensures that its cost base is far lower than its competitors'," he claimed.
But Novick said the lease arrangements for the planes, entered into by SAA when Coleman Andrews was still chief executive, meant SAA was paying more than the going rate for them.
Unless Mango was paying a subsidised rate for the planes it was leasing from SAA, its costs could not be lower than those of its competitors.
So far neither SAA nor Mango have disclosed the rate Mango is paying for the planes, except to say it is "market-related".
In the absence of any firm data to the contrary, it is impossible to assess the truth or otherwise of Mango's claims.
Article from http://www.busrep.co.za
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Watt, the chief executive of Business Connexion (BCX) , was scheduled to give evidence on Monday at the Tribunal's hearing into the proposed merger between Telkom and BCX. He was due to be cross-examined yesterday afternoon. But on Monday he was a no-show.
Telkom's legal team explained to the tribunal that Watt was having considerable difficulty fitting an appearance into his busy schedule.
They have offered to provide the tribunal with an affidavit from Watt, which would set out his views on the merger.
Watt explained to Business Report yesterday that he felt he had little to add to evidence that had already been given to the tribunal by earlier witnesses in support of the proposed transaction.
The offer of an affidavit may or may not satisfy the competition commission, as it will not give the commission or the parties objecting to the transaction any opportunity to cross-examine those views.
If the commission is not satisfied with this situation, it could subpoena Watt to appear before the tribunal.
For Watt, an appearance before the Tribunal could be uncomfortable given the rumoured disagreements about the benefits of the merger within the BCX board.
In the absence of Watt, the hearing continued with evidence from a Dimension Data executive indicating that the acquisition of BCX was part of Telkom's strategy to slow down the development of new technology that would weaken Telkom's overbearing dominance in this industry.
BLACK DIAMONDS Research into South Africa's black middle class seems to back up anecdotal evidence and criticism from trade union Cosatu and others that the rich are benefiting at the expense of the poor.
According to figures from the University of Cape Town's Unilever Institute of Strategic Marketing and TNS Research Surveys, not only are the poor lagging those in the high-income groups, but they were worse off in absolute terms in the first quarter of this year than they were a little more than a year earlier.
The figures show that estimated annual buying power of all black people rose from R300 billion in the last quarter of 2005 to R335 billion. But the buying power of the "black diamonds" was up from R130 billion to only R180 billion. This means the rest of the black population were poorer by R15 billion.
Of course, there are different ways of interpreting the figure.
Brait economist Colen Garrow has pointed out that figures from the SA Advertising Research Foundation show that between 2003 and 2005, about 975 000 consumers moved from living standards measure (LSM) 4 to LSM 7. And 147 000 moved from LSM 8 to LSM 10 - the home of the black diamonds.
If the trend is continuing, the explanation for the Unilever figures may lie in a population shift up the income scale rather than a redistribution of wealth.
The Black Diamond 2007 report is based on a sample of 4 500 people. It shows that an estimated 2.6 million people can now be classified as black diamonds, as opposed to 2 million in 2005.
John Simpson, the director of the Unilever Institute, says black diamonds account for 54 percent of all black buying power. "This compares with 10 percent accounting for 43 percent 15 months ago."
TNS Research Surveys' Nomsa Khanyile, says 1.2 million black diamond adults live in the suburbs (up from 0.45 million in 2005), while 1.4 million (down from 1.55 million) live in the townships.
But this doesn't mean they are turning their backs on the townships, says Simpson. "Even though they live in the suburbs, there remains a strong desire, right across the board, to maintain their township connections."
MANGO vs KULULA The battle of words between SAA's low-cost airline and its rival has heated up again now that the bumper tourism season has drawn to a close and filling planes is getting more difficult.
The two companies seem to have come to the conclusion that slagging each other off in the press is far cheaper than taking out ads and gets their message across more effectively than paid space does.
The latest salvo fired by kulula.com boss Gidon Novick seems to be that although kulula is able to offer low-cost fares, the fact that SAA's Mango does so means that it must be losing bucketloads of cash, and because SAA is owned by the state, this means it is costing taxpayers money. kulula is owned by British Airways/Comair.
Nico Bezuidenhout, the chief executive of Mango, denied this, saying the airline's lower cost base, modelled on successful low-cost carriers overseas, enabled it to offer lower fares on a sustainable basis.
"Mango's aircraft are more fuel efficient and technologically advanced, and give it optimal asset utilisation. Its optimised seating configuration ensures that its cost base is far lower than its competitors'," he claimed.
But Novick said the lease arrangements for the planes, entered into by SAA when Coleman Andrews was still chief executive, meant SAA was paying more than the going rate for them.
Unless Mango was paying a subsidised rate for the planes it was leasing from SAA, its costs could not be lower than those of its competitors.
So far neither SAA nor Mango have disclosed the rate Mango is paying for the planes, except to say it is "market-related".
In the absence of any firm data to the contrary, it is impossible to assess the truth or otherwise of Mango's claims.
Article from http://www.busrep.co.za
Market related or not, we have a suitable car for you at www.southafrica-carhire.com
Labels: South Africa - Airlines
