Telkom fined R449m

2012-08-07 10:28

Johannesburg - The Competition Tribunal on Tuesday fined Telkom [JSE:TKG] R449m for abusing its dominance in the telecommunications market between 1999 and 2004.

The fine followed a decade-long investigation into the telecommunications company's practices.

The case began in 2002, with internet service providers alleging Telkom charged its competitors high prices for using its services, while charging much lower fees to its subsidiaries and its customers.

AP reports the government still owns part of Telkom SA Ltd, once an entirely state-run company.

The company, with operations in other African nations, has had financial troubles in recent years. Subscribers also have increasingly dropped fixed telephone lines, the backbone of Telkom's business, for mobile phones.

Telkom shares dropped more than 3% in Tuesday midmorning trade on the JSE before recovering.

Half of the penalty is to be paid within six months of the tribunal's decision, while the balance is payable within 12 months thereafter.

At 10:19‚ the share price was down 16c to R17.89‚ off the session lows of R17.19.

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  • Citroes - 2012-08-07 10:40

    This makes me extremely happy. Now nail them again because they're STILL doing it.

      timothy.erasmus.35 - 2012-08-07 10:47

      Me too! Music to my ears! But now where is that 449m going to go to? Moving on they need to move on to MTN and their data charges...

      wesley.bischoff - 2012-08-07 10:51

      I totally agree Tim!!!!

      mlucejko - 2012-08-07 11:09

      Not only that !! Their service is 'crap' I have been waiting 5 days for them to fix my line, am still waiting.. Because they have the 'monopoly' on fixed lines they don't seem to care about their customers !!

      ianon.ym - 2012-08-07 11:23

      Great! But how is the fine money going to be redeployed?

      arthur.hugh - 2012-08-07 11:23

      No doubt they will increase the prices to recoup the money lost from the fine - so consumer will probably still lose in the end.

      ianon.ym - 2012-08-07 11:26

      Great! But how is the fine money going to be redeployed? Or is this one of those - "We'll announce that we will fine you - just don't pay us." stunts - who ever checks that these fines ever get paid and what happens to the funds once collected --- ?

      rob.gunning.1 - 2012-08-07 11:40

      Remember that Telkom does not print money. They have to obtain that cash from somewhere to pay that fine to government... That somewhere is you. Consumer gets screwed again. This is at best, a very well hidden tax and at worst a bad judgement that will end up costing the average guy more.

      marthinus.crous - 2012-08-07 11:59

      Instead of Telkom "paying" a fine. Why not let them do R449mil worth of upgrades to their networks? Then we all win. I cant get ADSL because they do not want to upgrade their exchange here, and there are many others with the same problem.

      marc.hugo.75 - 2012-08-07 12:01

      Good!! Err...wait a minute. Where's the money for the fine coming from?

      preshen.govender.90 - 2012-08-07 12:09


      john.fourie.18 - 2012-08-07 12:15

      Until I realized that this fine is going to be paid with tax payers' money, I too thought it was a good idea.

      bharath.bhumi - 2012-08-07 20:44

      Citroes you idiot ! These companies who brought these charges have just succeeded in taking CONSUMER cash, PRIVATE money and handing over to the public sector who will in turn freely distribute it to the thousands of corrupt politicians in parliament. SARS is not enough, now we have the Competition Tribunal. Well done - it's because of the opposition companies putting their own selfish market strategies ahead of the consumer that we will never enjoy price decreases. Now Citroes, you and everyone like you should immediately go support those opposition companies that happily gave away OUR R500mil to the corrupt government - you fool !

  • kevin.maree.3 - 2012-08-07 10:40

    Couldn't have happened to a better bunch!

      marthinus.crous - 2012-08-07 16:23

      I see atleast 11 people working for Telkom :)

  • paulus.deboer.3 - 2012-08-07 10:41

    So how is my part of this going to be refunded? Not at all, I guess. Where does such fines go to.. who gets the money?

      Malcolm - 2012-08-07 10:54

      Agree, when do we get our refund? Seeing as how the money was stolen from us? Oh wait we won't it will go to the ANC who will spend it on a party... (And then Telkom will increase prices to cover the cost of the fine)

      clive.schonken - 2012-08-07 11:05

      Paulus, dream on, your part is not going to be refunded, you are going to be partly responsible for the payment of the fine that will be used for bonus payments to some unknown department.

      patsy.smith.125 - 2012-08-07 14:31

      Never the consumer, that's for sure!

  • - 2012-08-07 10:41

    About time! Public 1 .. Hellkom 0

  • pieter.pan.184 - 2012-08-07 10:42

    They should fine ICASA and government for helping to protect Telkom. Things won't get better until government is forced to sell it's shares in Telkom.

  • alec.stafford - 2012-08-07 10:54

    I believe they are deserving of the fine, but in the same vain, they may have to reduce staff numbers to compensate for the cost of the fine.

  • - 2012-08-07 10:54

    Tjo this is bad man, So Mobile phones are a danger to Telkom, wow its funny hw business can change eish sad

  • mnbain - 2012-08-07 11:00

    To me this amounts to an additional tax on the company that has been looting customers for years and hampering development. The government raped the country via the prices (along with SBL) but now gets an extra slice of PIE. You cannot be referee and player!

  • freestylefilms - 2012-08-07 11:01

    This is not good!!! Telkom is still largely owned by the Government, So who will pay for the fine and where will the money come from? On top of that, will they report where the money goes? i reckon all the money will go to the lawyers and other costs...... public wont benefit from this!

  • BigChiefPlumbPudding - 2012-08-07 11:03

    You do all realise we'll be paying?

  • Steve - 2012-08-07 11:05

    Question is ..... who gets the money, is it the state or does it go back to the poor individuals who paid over the top for services during the price fixing?

  • captaine.morgan.90 - 2012-08-07 11:05

    AWESOME! NOW give that back to us. I will take 1 of those millions. What if Telkom raises their prices in order to raise funds to pay off this fine? Who can guarantee that's not gonna happen?

      PhilipJCJonas - 2012-08-07 11:10

      this should not happen besides the fine is only 2% of their annual turnover...

  • PhilipJCJonas - 2012-08-07 11:10

    How will this benefit us the end user. Are my internet costs gonna drop, is the market going to open up for competitors... ? and besides, R449m is less than 2% of their anual turnover, which is about R32bn

  • iceman196 - 2012-08-07 11:10

    corrupt bastards,lets get some proper competiton in here asap, R449 M is probally nothing tot he scum yet they refuse to give us a decent service, 10MB is a joke in europe and the far east

  • Ze Don - 2012-08-07 11:11

    People are not using land lines as they're over priced and the service from hellkom is pathetic! Give people decent bandwidth at a reasonable price and they'll make money... unfortunately hellkom believe in the get rich quick approach to business: milk your hand full of customers until they drop you, then go looking for the next sucker!

  • luke.gray.549668 - 2012-08-07 11:12

    no wonder its snowing!!!!

  • aspruyt - 2012-08-07 11:15

    Bastards need to be cut down even more!

  • mnbain - 2012-08-07 11:16

    Referee and player... Through this fine, government has merely extracted more money from the company. They created the problem with protective legislation. As major shareholder they had the power to control pricing. They were happy to take the money then, and now they just taking some more... This is not a victory for the people, but merely more looting.

  • lulama - 2012-08-07 11:17

    Good stuff...why pay for a line I don't use?

  • wayne.geyer.3 - 2012-08-07 11:20

    Go Hellkom!!

  • clarence.ledwaba - 2012-08-07 11:20

    I'm afraid some people will be retrenched at Telkom. This will not change anything though but will only benefit industry leaders like IS, MTN and Vodacom.

  • reynardt - 2012-08-07 11:21

    Finally!!! Burn you fat cat bastards, I hope they suffer a dear lesson!!! Don't worry people, this opens a wonderful oppertunity for foreign (maybe local) interest. We might well just see a new kid on the block (or ruler) very shortly.

      JevonMarshallJohnson - 2012-08-07 11:46

      yeah sure lol

      Ze Don - 2012-08-07 11:50

      The problem is that hellkom has SOLE rights to the telecommunication infrastructure in SA, this means that no one else can install phone cables to your home. If this changed we would probably see real competition, this will never happen though as the government knows hellkom would be bankrupt in a matter of months!

  • kwbateman - 2012-08-07 11:22

    Wonder what will happen to all the nice performance bonus payments those responsible got?

  • olewyn.lewis - 2012-08-07 11:24

    all fine and dandy but since we were the ones that were robbed into higher fees, will we see any of the cash that they have been fined or will we see our rates drop? i dont think so, the money goes to government for their next big house or car.

  • JevonMarshallJohnson - 2012-08-07 11:36

    maybe if you delivered on the promises of free upgrades for your slowest bread winning offerings as advertised you might get some sympathy here...

  • bonga.funani.7 - 2012-08-07 11:38

    Where is this money going to come from? I can smell another bend over from non other than the taxpayer on this issue.

  • daryl.alexander.33 - 2012-08-07 11:39

    All that money for the fine will go to the government for the guys who were supposed to score off the e-tolls.

  • richard.zanner - 2012-08-07 11:40

    Great stuff. These monopolies think they can charge what they like as we have no option but to use their service.

  • vanessa.higgins.35 - 2012-08-07 11:40

    So do we the paying public get some of this money back? Probably not.. who gets the fine money. And they are still busy doing the same thing now.

  • terrence.r.evans.9 - 2012-08-07 11:42


  • riccardo.vallaro - 2012-08-07 11:46

    What's the point of giving Telkom a fine when this does not come back to us the consumer, I do not get the point besides the fact that I see Telkom increasing prices

  • maylani.bezuidenhout - 2012-08-07 11:46

    Ja but watch we are going to pay for it... watch the prices rise steeply in the next few months.

  • talana.basson - 2012-08-07 11:46

    in some weird hush-under-the-bridge tipe of way, the customers wil probably pay for this aswel

  • pierre.walt - 2012-08-07 12:08

    Who will get the money and where will it be spend?

  • zaaristotle - 2012-08-07 12:10

    This all well and good, but I don't think these fines work. In the end you and I as consumers pay anyway through higher prices. I would prefer to see no COMPANY fines. The actual decision makers (CEO, HOD's etc.) who decide on these monopolistic practices should get fined. That will make them think about their actions before they think about their bonusses.

  • ian.wilkinson.9235 - 2012-08-07 12:16

    thats who gets the loot? surely the people who've been over-charged for all this time?

  • colin.taylor.9883 - 2012-08-07 12:21

    So where does the R449m go??? Same story as the Bread Price Fixing fine.... Why does the Competition Board not allow for the fine to benifit the consumer who has been swindled?

  • david.beattie.1420 - 2012-08-07 12:33

    It is we, the public, who have been fleeced over the years. So why not let the 'fine' comprise a payback in the form of vastly reduced charges until the debt is paid

  • laven.naidoo.127 - 2012-08-07 12:41

    When Telkom did these wrong doings, it was owned by the Government, now that it is listed, the Government is fining it for things that were done under the Government's watch, by doing this, is the Government not just robbing the current outside shareholders in Telkom?

  • napolita.kio - 2012-08-07 12:43

    Wow, so a government-owned company is fined by the owner who will receive the fine to later "re-capitalize" the company. Nice!

  • sjg7373 - 2012-08-07 12:49

    About time!!!!

  • simon.preston.1804 - 2012-08-07 13:03

    Where does the R450m go?

      napolita.kio - 2012-08-07 13:06


  • martin.ferguson.7311 - 2012-08-07 13:26

    decade long investigation.WOW

  • patsy.smith.125 - 2012-08-07 14:29

    About time!!!

  • td.hlatshwayo - 2012-08-07 17:04

    What....Hellkom gets a 12.83% discount from the original fine ? why not the original 3.5 billion ? Why can't it be banned or this going to open up competition ?.....i just wonder where this whole money is gonna go,,,,,anybody know what happened to the money (millions) those bread companies were fined ?

  • byron.jay.37 - 2012-09-17 09:53

    This proves. No monopoly can control the competitive nature of people. Now to compete for a greater extent of equality...and self-efficacy.

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