Telecommunications giant Telkom will go ahead with its plans to acquire South Africa’s fourth-largest internet service provider (ISP) in the dial-up market, Tiscali SA, allegedly for R400-million despite “strong opposition” from a number of industry players.
The Internet Service Providers’ Association (Ispa), a body that represents 82 ISPs, on Thursday accused Telkom of being anti-competitive. Ispa said the potential acquisition will further entrench the giant’s monopolistic position in the South African telecommunications market and warned that this will have detrimental effects for consumers.
“Telkom is increasingly shifting outward to seek new growth opportunities in selected market areas. As such, Telkom will act on good opportunities that fit the Telkom business model,” a company spokesperson said in a statement.
“Telkom acts within the parameters of the law and the regulatory landscape in taking up such opportunities. Telkom is fully compliant with the Competition Act and Telecommunications [Act], which also specifically outlaws anti-competitive behaviour.”
Ispa co-chairperson Greg Massel said the organisation has not approached the Competition Commission but did not rule out the possibility doing this in “good time”.
Massel said what the transaction — if successful — means is that Tiscali will be forced to use exclusively the services of Telkom and therefore further hamper the prospects of the second national operator (SNO).
In addition, it will perpetuate the status quo that has seen Telkom dominating the industry through anti-competitive means.
However, according to Telkom CEO Sizwe Nxasana the company supports efforts to create healthy competition through the licensing of a viable and sustainable SNO by means of a process of managed liberalisation.
The government is expected to announce its long-protracted decision on the SNO before the end of August. — I-Net Bridge