Kevin Davie is not happy with the settlement Telkom reached with the Independent Communications Authority of SA (ICASA) earlier this month.
"From a consumer point of view, that must be the biggest lot of nonsense that you have ever heard in your life," he says of the settlement, which is to see Telkom effectively pay consumers back the increases made in January over a two-year period.
Davie is the founder of portal-turned-Internet service provider Woza, but has lodged a complaint with the Gauteng Consumer Affairs court in his private capacity. In a two-page letter filed late last week, he asked the court to make Telkom pay him the R1 270 he says the company has overcharged him so far this year, with interest. According to his calculations the overpayment this year is R700 million for the entire country.
"If you look at the legislation the consumer protector has, it seems logical that I can go to him and say that I want my money back," he says.
On 6 June, ICASA and Telkom announced they had settled a legal battle around the tariff increases Telkom introduced in January. ICASA claimed the company had increased prices far beyond what it allows in regulation; Telkom said the regulation was invalid on technical grounds.
In the settlement, Telkom promised to give up R320 million over the next two years over and above making sure future increases make up for what it is charging extra this year.
Davie says Telkom has found a legal loophole to do what every business would love to achieve. "These guys are charging up to three years in advance," he says. He believes he is personally being overcharged by about 15%, and this is the money he wants.
"It would vary around that number," he says of other consumers. "Telkom can calculate the exact amount of every account."
He is confident he has a good complaint and will see his money. And if he does win the case, he expects every other Telkom client to be included in the victory. He believes it impossible for the company to settle his case and not do the same for every other consumer in the country.
He thinks a settlement may be in the works, as Telkom cannot afford to have a huge potential contingent liability on its balance sheet when it is publicly listed, as the government plans to do early next year, with such a legal issue outstanding. This is one of the reasons it cited for coming to a settlement with ICASA.
It is about the money, Davie says, his money. But he is also aware of the broader impact his action could have, considering that the government is the majority shareholder in Telkom.
"I paid my bill the other day, and as I was walking out of the Post Office I realised that 15% of what I had just paid was in the form of a levy to help them [Telkom] with the IPO [initial public offering]. I resent that, I feel really angry about that."
He does not dispute the value a successful listing could have for all citizens, as government puts the money it earns to good use, but says such a levy "should be put through the budget and made transparent. Don`t do it under the table."
An outside chance
Davie took no legal advice before lodging his claim, but at least one expert telecommunications lawyer says he stands a chance.
"It may very well succeed because ICASA doesn`t have the legal right to enter into a settlement that says it is okay for a party not to abide by its regulations," the lawyer says. "It doesn`t have the legal authority to exempt anybody from the law."
If Gauteng consumer protectors take up the issue, it may come down to Telkom`s original defence against the ICASA challenge: were the tariff regulations ICASA made valid or not? Issues of jurisdiction may arise, but the validity of the regulations will be central.
Davie believes the settlement between ICASA and Telkom is tantamount to an admission that the company is overcharging its customers and that it admits the regulations are solid.
Even if things don`t go all his way and he doesn`t get his money back, he thinks Telkom can only lose.
"If Telkom doesn`t like what happens in [the Gauteng consumer] court they can take it to a higher court, but even before that the court of public opinion would have spoken," he says.
Telkom representatives could not immediately be reached for comment.
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