TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentral TechCentral
    NEWSLETTER
    • News

      Floods blamed as gov’t falls behind in set-top box roll-out

      24 June 2022

      Vumacam announces big Jo’burg expansion drive

      24 June 2022

      Eskom crisis spirals: stage-4 power cuts this weekend

      24 June 2022

      Illegal strike at Eskom could make load shedding worse

      24 June 2022

      State capture probe ends but South Africa remains ‘broken’ by corruption

      23 June 2022
    • World

      Amazon has a plan to make Alexa mimic anyone’s voice

      24 June 2022

      Apple, Android phones hacked by Italian spyware

      24 June 2022

      Zendesk nears buyout deal with private equity firms

      24 June 2022

      Crypto crash survivors could become ‘tomorrow’s Amazons’

      23 June 2022

      Tether to launch a stablecoin tied to the British pound

      22 June 2022
    • In-depth

      The great crypto crash: the fallout, and what happens next

      22 June 2022

      Goodbye, Internet Explorer – you really won’t be missed

      19 June 2022

      Oracle’s database dominance threatened by rise of cloud-first rivals

      13 June 2022

      Everything Apple announced at WWDC – in less than 500 words

      7 June 2022

      Sheryl Sandberg’s ad empire leaves a complicated legacy

      2 June 2022
    • Podcasts

      How your organisation can triage its information security risk

      22 June 2022

      Everything PC S01E06 – ‘Apple Silicon’

      15 June 2022

      The youth might just save us

      15 June 2022

      Everything PC S01E05 – ‘Nvidia: The Green Goblin’

      8 June 2022

      Everything PC S01E04 – ‘The story of Intel – part 2’

      1 June 2022
    • Opinion

      Has South Africa’s advertising industry lost its way?

      21 June 2022

      Rob Lith: What Icasa’s spectrum auction means for SA companies

      13 June 2022

      A proposed solution to crypto’s stablecoin problem

      19 May 2022

      From spectrum to roads, why fixing SA’s problems is an uphill battle

      19 April 2022

      How AI is being deployed in the fight against cybercriminals

      8 April 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»In-depth»How Telkom allegedly crushed competition

    How Telkom allegedly crushed competition

    In-depth By Editor25 October 2011
    Facebook Twitter LinkedIn WhatsApp Telegram Email

    James Hodge of Genesis Analytics has painted a stark picture of wide-ranging anticompetitive abuses, including excessive pricing and price discrimination, allegedly committed by Telkom in the last decade.

    Hodge is presenting this week to the Competition Tribunal in its hearings into alleged anticompetitive behaviour by Telkom. Genesis Analytics has been engaged by the Competition Commission to provide an economic assessment of the allegations raised by the commission against Telkom.

    The commission wants the tribunal to impose a fine of 10% of Telkom’s 2003 revenue, which equates to more than R3,5bn, for alleged abuses of its dominant position in telecommunications in SA.

    In a formal submission by Genesis, the company says value-added network service (Vans) players — these were independent Internet and telecoms service providers — were “completely dependent on Telkom for the provision of telecoms facilities”.

    Telkom stands accused of price discrimination and engaging in “exclusionary strategies”, including the refusal to supply essential facilities as well as conduct designed to induce customers not to deal with competitors. “These actions, both individually and collectively, impacted negatively on competition,” Genesis says.

    According to the report, Telkom’s pricing of access to telecoms facility to Vans providers and their customers “can reasonably be characterised as excessive [and] in contravention of … the Competition Act”.

    Genesis assessed whether Telkom’s practice of charging its customers a lower price for Diginet access relative to what was charged to Vans providers and their customers constituted prohibited price discrimination. It found it did and says this had the effect of “substantially lessening and preventing competition”.

    Telkom’s pricing conduct could also be characterised as “exclusionary”.

    “The effect of Telkom’s discriminatory pricing strategy is that it placed the independent Vans providers at a severe competitive disadvantage vis-à-vis Telkom in the downstream Vans market,” the report says.

    “The independent Vans providers were all saddled with significantly higher access fees, which negatively impacted on their ability to compete against Telkom in the provision of Vans”.

    Telkom also engaged in a “range of exclusionary strategies involving the refusal to supply essential facilities as well as conduct designed to induce customers not to deal with competitors”.

    The report finds that protections given to Telkom in law were not as broad as those the company sought to impose through standard form contracts. It says further that Telkom’s refusal to supply additional telecoms links to Vans providers contributed to them being less effective competitors.

    “Considered collectively, the numerous strategies employed by Telkom made it increasingly difficult for the Vans providers to compete against Telkom,” Genesis says in its report.

    “By artificially reducing the competitiveness of independent Vans providers through the application of discriminatory access charges and through engaging in a number of exclusionary strategies, Telkom was able to enhance its share of the downstream Vans market at the expense of its competitors.”

    Also, Telkom‘s conduct “not only hindered the ability of its competitors to compete in the market, it also formed the basis for the decision of a large Vans provider to effectively exit the market, contributed to the decision of another Vans provider to suspend the provision of [virtual private network] services for a number of years and discouraged further investments by competitors.”

    Telkom is expected to begin arguing its case before the tribunal from 1 December.  — Duncan McLeod, TechCentral

    • Subscribe to our free daily newsletter
    • Follow us on Twitter or on Facebook
    • Visit our sister website, SportsCentral (still in beta)
    Genesis Analytics James Hodge Telkom
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleReview: Logitech’s Wrls Spkr Bluetooth adapter
    Next Article Vodacom plays down uncapped mobile broadband

    Related Posts

    The great crypto crash: the fallout, and what happens next

    22 June 2022

    Telkom Infinite launched: R299 for unlimited mobile data

    21 June 2022

    Has South Africa’s advertising industry lost its way?

    21 June 2022
    Add A Comment

    Comments are closed.

    Promoted

    Watch | Telviva One: adapting to the requirements of business

    24 June 2022

    Huawei P50 now available for pre-order in South Africa

    23 June 2022

    Calabrio paves way for SA’s cloud contact centre WFO journey alongside AWS

    23 June 2022
    Opinion

    Has South Africa’s advertising industry lost its way?

    21 June 2022

    Rob Lith: What Icasa’s spectrum auction means for SA companies

    13 June 2022

    A proposed solution to crypto’s stablecoin problem

    19 May 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.