CUASA slams Telkom LCR suit

Johannesburg, 10 Apr 2003

The Communications Users` Association (CUASA) has slammed Telkom`s legal action against cellular least-cost routing (LCR).

Last month, Telkom published a notice inviting interested parties to join in the Pretoria High Court action and raise a defence regarding the sale, distribution and use of LCR.

LCR, sometimes known as corporate connect, uses what is essentially a cellphone plugged directly into a company PABX to route calls to cellphone numbers directly to the cellular networks. Companies have reported savings on their telephone bills ranging from 10% to 40% after implementing LCR because they avoid using the Telkom network for such calls.

Telkom initially instituted legal proceedings against MTN, Vodacom and other LCR players in 2000, arguing that least-cost routing was an illegal circumvention of its network. It later reached an out-of-court settlement with Vodacom. Nedtel, Nashua, Orion and MTN are opposing Telkom`s application.

Telkom spokesman Andrew Weldrick says: "The High Court recognised that the outcome of Telkom`s application could have consequences for users, marketers and suppliers of LCR, including Vodacom, which is why it ordered Telkom to publish the notice that appeared on 9 March inviting interested parties to join in the High Court action and raise a defence regarding the sale, distribution and use of LCR."

In a statement released today, CUASA accuses Telkom of double standards and an "inclination to adopt predatory profiteering practices" by continuing its legal battle.

CUASA spokesman Ray Webber says: "How can Telkom possibly expect anyone to take its legal bid against LCR providers seriously if it settled in the same matter with Vodacom, of which it owns 50%?

"It should be clear to anyone that Telkom simply wants to return to a protective legal framework where it is entitled to extort profits in any way it deems fit. This attitude flies in the face of any sector `liberalisation` and comes, once again, at the expense of the consumer," says Webber.

Weldrick comments in response: "While Telkom did withdraw its action against its 50% joint venture Vodacom, in terms of the notice issued to all interested parties, the outcome of the case will also affect Vodacom."

According to Webber, Telkom utilises flat-rate charges when users call from a standard telephone line to cellphones. "It costs consumers the same to make a 15-second call from a Telkom line to a cellphone as it does to make a 59-second call from the same phone. However, LCR providers bill by the second - saving their users money on almost every call."

Webber argues that there is little difference between using a standalone cellphone to make calls to other cellular phones, or plugging the same solution into a PABX. "It`s something the courts will need to decide on, but I can`t see how there is a difference. Anyone can legally use their cellphone to make a call. Telkom is arguing that when this same call is routed via an internal PABX, it now somehow becomes illegal."