Telkom’s attempt to have one of two potentially damaging competition cases against it quashed has been dashed by the Competition Tribunal, leaving the telecommunications operator potentially facing a fine amounting to billions of rand.
The case relates to allegations of abuse of dominance referred to the tribunal by the Competition Commission in October last year, which was later bolstered by similar accusations made by Internet Solutions.
“We find Telkom’s objections to the commission’s pleadings are without merit,” the tribunal says in a statement. “Where the objections were in the nature of exceptions to the pleadings, we find that these have been either misconceived or are without substance.”
Telkom will not be pleased with the outcome of the ruling, since it will now have to face the tribunal on the actual case, which the commission referred to the tribunal last year and recommending a R3,5bn fine be imposed.
Late last year, Telkom called on the tribunal to drop the case, calling the accusations by the commission “vague and unconstitutional”. However, the tribunal has ruled that the commission made its case adequately and the actual case will begin near the end of May.
The case began as early as 2005, when the commission started investigating complaints against Telkom lodged by Internet Solutions, MWeb, Verizon Business (now MTN Business) and the Internet Service Providers’ Association. Internet Solutions later added a complaint related to the prices Telkom charged for access to the Sat-3/Safe undersea cable system.
The commission found that Telkom had charged its competitors excessive prices for basic infrastructure.
Telkom last month narrowly escaped additional charges to a second competition complaint it is facing. The commission tried to add charges of margin squeezing against Telkom in a case brought by value-added network service providers (now fully licensed operators).
The case started in 2004 and alleges that Telkom abused its dominance in the market. However, the tribunal last month denied the commission’s request to add the price squeeze charges to the case.
The case brought by the value-added network service providers was also referred to the tribunal, with a recommended fine of 10% of Telkom’s annual revenue for the year of alleged infringement. In the two cases, Telkom is potentially facing fines of more than R7bn. — Candice Jones, TechCentral