Tim Wyatt-Gunning, previously joint CEO of telecommunications company Storm and now CEO of Internet service provider Web Africa, says Telkom should be handed a hefty fine by the Competition Tribunal and that it has by no means reformed its ways as it claims.
Storm was one of the companies that lodged complaints about anticompetitive behaviour against Telkom.
Telkom has been embroiled in a battle against the Competition Commission over allegations that it charged excessive prices, limited access to essential facilities for competitors and engaged in generally anticompetitive behaviour in the first half of last decade. The operator argues it was allowed to do so due to legislation at the time and commitments made to government when it was partially privatised.
Telkom has also argued that a great deal of time has passed since the alleged contraventions and that it no longer operates in the fashion it did at the time. Wyatt-Gunning says the first of these arguments is irrelevant and the second is false.
During his time at Storm, Wyatt-Gunning was part of the group of value-added network services (Vans) providers that initially took the complaint against Telkom to the commission.
Many years later, Wyatt-Gunning says he can say “categorically” that Telkom is “still up to [its]old tricks, albeit in a less damaging manner”. At the time of the complaint, Wyatt Gunning says Telkom routinely failed to assist Vans providers and competed unfairly on pricing.
This had a “material impact on all of our businesses” and resulted in potential customers staying with Telkom and many Vans customers returning to it when Vans couldn’t provide further services because of Telkom’s behaviour.
Telkom has argued that the behaviour of which it stands accused no longer occurs and that the case is less relevant on account of the amount of time that has elapsed since the complaint was first brought. But Wyatt-Gunning says this isn’t accurate.
“[Web Africa] has lodged several objections recently to our Telkom account managers regarding Telkom sales agents approaching customers who are moving over to us from other ISPs with ‘special offers’,” he says.
“While there is clearly a lot more separation between wholesale and retail than there was in 2003, we still believe Telkom retail is not treated at a full arm’s length alongside other wholesale customers.”
Wyatt-Gunning says he wants to see the penalty that the Competition Tribunal might impose on Telkom “match the crime” and says the fact that a number of years have elapsed since the initial complaint is no reason to lessen the punitive measures.
“Uncompetitive practices over the years have had a knock-on effect today,” Wyatt-Gunning says. “In the absence of a punchy regulator, Telkom has dragged its feet allowing industry players to find themselves in the ludicrous position where, today, Telkom represents around 80% of our network cost base.”
According to Wyatt-Gunning, the retail price of broadband in SA continues to be negatively affected by “a skewed, anticompetitive landscape”. He says this benefits neither the consumer nor the economy.
“This is not in the best interest of the consumer and certainly not in the best interest of an economy where business input costs — like telecoms — remain unreasonably high and continue to see this country remain uncompetitive.” — Staff reporter, TechCentral
- See also: Telkom has a point, by Duncan McLeod
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