Johannesburg - Telecommunications provider Telkom [JSE:TKG]
said on Tuesday it was still studying a judgment by the Competition Tribunal
which found it guilty of abusing its dominance in the telecommunications market
between 1999 and 2004 and slapped it with a hefty R449m penalty.
“Telkom is currently in the process of studying the judgment
and its implications‚ and if necessary a follow-up announcement in this regard
will be considered in due course‚” the telecoms group said in a response to the
verdict which saw its shares dive more than 3% in mid-morning trade before
Announcing its judgment on Tuesday morning‚ the tribunal
concluded that Telkom leveraged its upstream monopoly in the facilities market
to advantage its own subsidiary in the competitive value added network market.
“Telkom's conduct caused harm to both competitors and
consumers alike and impeded competition and innovation in the dynamic VANS
"Half of the penalty is to be paid within 6 months of the Tribunal’s
decision while the balance is payable within 12 months thereafter.”
The Competition Commission had asked the tribunal to impose
an administrative penalty of R3.5bn. The commission wanted the fine to act as a
deterrent for excessive pricing by other dominant companies.
The commission asked for an additional fine of R1bn for
Telkom's refusal to give a competitor access to an essential facility.
The case against Telkom started in 2002 when value-added
network service providers accused Telkom of exclusionary conduct and price
More than 20 companies‚ including Internet Solutions‚ and the
South African Value-added Network Services Association complained to the
commission about Telkom’s conduct.
The case was referred to the tribunal in 2004‚ but hearings
only began at the end of last year after several challenges to the competition
The service providers alleged that Telkom was denying them
access to telecommunications infrastructure that would enable them to offer
clients value-added services such as e-mail‚ internet access‚ protocol
conversions and video conferencing.
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