Optus Networks Pty Limited - proposed acquisition of all of the shares in Alphawest.

Summary

Optus Networks Pty Limited proposes to acquire all of the shares in Alphawest Limited. The matter was not considered under the informal merger guidelines.

Market definition

The market for network consulting and integration services; and the market for network outsourcing services.

Competition analysis

The ACCC decided not to intervene pursuant to section 50 of the Trade Practices Act 1974 for the following reasons:
1. The acquisition will not exceed the ACCC's market concentration thresholds in either market;
2. Barriers to entry and exit are low given the availability of IT talent and the nature of commercial arrangements for IT consultants. IT commercial arrangements run for relatively short periods and are generally project and fee based. Thus smaller firms are able to enter and exit the market regularly; and
3 Although import competition is not significant, vigorous competition is provided by telecommunications companies (Telcos) and specialist network service providers (SNSP). Telcos are increasingly engaging in the supply of disparate technologies and data services in addition to traditional voice services. This trend is implemented through acquisitions of or partnerships with SNSP.

Merger type

Horizontal

Initiation

Parties