Business

Telkom in the dock for putting squeeze on SA telecoms

Lloyd Gedye

After years of legal battles, Telkom is appearing before the Competition Tribunal, accused of unfair business practices and charging excessive prices.

It may have taken seven years and numerous legal challenges, but the Competition Commission’s case against Telkom finally made it to the Competition Tribunal on Monday.

South Africa’s fixed-line operator stands accused of abusing its dominance by charging excessive prices; refusing access to an essential facility; and engaging in price discrimination thereby making its downstream rivals less competitive in the telecommunications market.

This alleged behaviour dates back to before 2002, when the initial complaint was lodged, but the commission’s case has since been subject to numerous legal challenges that delayed the case.

Telkom has denied these allegations and is seeking to defend itself in the tribunal hearing.

If Telkom is found guilty in the hearing, it could face a penalty of as much as 10% of its 2003 turnover, which could be as much as R3.5-billion.

The complaint was lodged with the commission by twenty-one entities, which included the South African VANS (value-added network services) Association, the Internet Service Providers’ Association and nineteen other value added network service providers.

By February 2004, the commission had completed its investigation and referred its case against Telkom to the tribunal.

However, Telkom decided to challenge the commission’s jurisdiction in the Supreme Court of Appeal, a legal move that resulted in a five-year delay to the tribunal hearing, but ultimately was lost by Telkom.

Some subsequent legal challenges, followed based on the commission’s decisions to amends its papers, which have since been resolved and the case has finally reached the tribunal.

The commission’s case was laid out on the opening day of the hearing by Advocate Martin Brassey, while Telkom’s case was laid out by Advocate Willem Van Der Linde.

The first witness was Mike Brierley, the former CEO of MTN Network Solutions and now a telecoms consultant.

The Mail & Guardian understands that Brierley’s testimony will be key to the commission’s case but his testimony on Monday was heavily focused on telecoms technology and the definitions of the various links that create a network.

Telkom spokesperson Pynee Chetty, when asked for comment on the tribunal hearing said, “We don’t litigate in the media, we won’t comment before the hearing.”

The hearing has been set down to be heard between Monday October 17 and Friday October 28 and will then resume between the December 1 and 9.

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