Telkom competition confusion

A protracted competition case against Telkom, set to be heard by the Competition Tribunal, seems to have hit another block, following market speculation that Telkom is using every possible delay tactic.

Telkom faces a fine of up to R3.6 billion if found guilty of the accusations of abuse of dominance levelled against it.

However, neither the Competition Commission, nor the Competition Tribunal would comment on whether the process is being stalled by the operator. The commission says it cannot comment on cases to be heard by the tribunal, and the tribunal says the commission needs to comment on why it has taken so long for the case to be heard.

The case has faced several delays, with Telkom applying to the commission for time extensions to submit its response. Adding to the confusion, almost two months after the company was supposed to file, it is still unclear whether it has.

The Competition Tribunal says Telkom is still filing its necessary documentation, while the commission says the company has finished filing its response to the case.

Telkom's filing is supposed to be all that is left to be done before a pre-hearing is scheduled, when the company is expected to make its case against the accusations.

The fixed-line giant has responded to the accusations of delaying tactics, saying only that it has complied with everything that has been asked of it. “Telkom is engaging with the Competition Commission and the Competition Tribunal wholly in accordance with its rights, as afforded to it by the Competition Act and the Competition Tribunal rules,” says the company's group executive for legal services, Anton Klopper.

The case stems from a complaint submitted by the then value-added network service providers to the Competition Commission, in 2002. In 2004, the commission ruled that Telkom should appear before the tribunal.

The providers accused the fixed-line operator of abusing its market dominance by refusing to supply them with backbone and access facilities, unless they met Telkom's conditions.

Telkom disputed the matter, and used a legal loophole to dodge the jurisdiction of the Competition Commission, saying it should rather fall under the jurisdiction of the Independent Communications Authority of SA.

However, the Supreme Court forced the case back into the hands of the competition authorities, clearing up any possible jurisdiction confusion.

This alleged abuse of dominance led to the Competition Commission recommending to the Competition Tribunal that Telkom be fined 10% of its annual revenue for its financial year ended 31 March 2008. Telkom's revenue was R35.9 billion during that period and so the fine could be as much as R3.6 billion.

If Telkom delays further and does not get an extension, the case gets stuck, or the Competition Commission must bring an application of default agreement against it.