Johannesburg, 12 Dec 2006
A Cape Town-based company that provides and manages ICT solutions for new residential property developments has accused Telkom of using a legal loophole to block competition in the property development/telecommunications sub-sector.
Atec Systems and Technologies MD Gerhard Loots says when his company applied for ISDN lines and ADSL feeds for one of its property developments, Telkom's legal department refused to allow the sale to take place.
According to Loots, Telkom said the sale would be contrary to its licensing conditions, as the transaction Atec wished to undertake would allow the company to resell the telecoms services to home-owners.
However, Telkom later launched the Property Development (PD) Connect initiative, which aims to assist property developers, architects and construction-related services to plan and implement telecoms infrastructure in new property developments.
Through the initiative, Telkom would provide a similar service offering to the one it prevented Atec from offering.
Loots notes the only way companies such as Atec can provide telecoms services for new property developments "is if you offer Telkom services, under the terms and conditions set by Telkom, and that is anti-competitive behaviour".
Working within the conditions set by Telkom also limits the choices available to the consumer, because - while PD Connect only provides for connections to Telkom - independents would allow all telecoms providers to link through their internal network, ensuring residents have a choice, he says.
Loots adds that Atec engaged in discussions with Telkom for two months in an attempt to resolve the problem so that the transaction could be completed.
When negotiations failed, the company approached the Independent Communications Authority of SA (ICASA), in an attempt to get some guidance on the matter, he says. This attempt is still in progress.
Good reason
Telkom notes that according to the Electronic Communications (EC) Act 36 of 2005, a person/company needs an appropriate private telecoms network licence before it is able to render a communications service.
"Accordingly, anyone who wants to provide a network in a private estate, or anywhere else for that matter, must be issued with an electronic communications network service licence," Telkom says.
Mike Silber, a consultant with Michalson Attorneys, adds that until ICASA issues new licences in line with the EC Act, Telkom has good reason to be hesitant to provide that kind of connection.
There is a concern that with licences issued under the repealed 1996 Telecommunications Act and where the calls are terminated outside Telkom's network, selling services to property developers could be a breach of the fixed-line operator's own licence conditions, unless in terms of an interconnection agreement, he says.
The fact that this view allows Telkom to entrench its direct relationship with the customer instead of being intermediated by the developer may not be relevant, he says.
Related story:
Telkom connects with property developers
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