The Competition Tribunal is this week set to hear arguments related to the settlement agreement reached between the Competition Commission and Telkom in June.
The agreement with the commission is subject to approval by the tribunal, which will hear the matter on Thursday and Friday this week, along with hearings into the settlement agreement reached between the commission and a cartel of construction companies.
In June, Telkom agreed to pay a R200m penalty and to separate “functionally” its retail and wholesale divisions. It also agreed to adhere to pricing commitments for the next five years and to allow its future conduct to be monitored as part of the broad-ranging settlement with the commission related to anticompetitive abuses that took place between 2005 and 2007.
A series of complaints were lodged against Telkom by Internet service providers that alleged that the operator abused its dominance. The commission referred the matter to the tribunal in 2009.
The agreement follows Telkom’s decision to pay a R449m fine related to earlier complaints against it pertaining to accusations that it denied rivals access to essential facilities between 1999 and 2004.
If the Competition Tribunal agrees to the latest settlement, Telkom will have to pay off the R200m penalty over three years. It will also have to keep separate internal accounts for its own retail services and Internet access products so that it can be monitored to ensure it does not engage in margin squeeze in future.
Under the agreement, Telkom has also agreed to reduce the prices of its wholesale services implicated in the complaint – namely, subsea bandwidth, national high bandwidth transmission lines, access to broadband digital subscriber lines via its IP Connect services and Digital leased-line access. It has also agreed to some related retail price cuts. Details of the price cuts are not being made public because releasing them would have implications for Telkom’s competitiveness, the commission says.
Telkom has agreed that any price cuts over the next three years will not be reversed in 2017 or 2018. — (c) 2013 NewsCentral Media
