Stock in fixed-line provider Telkom has again fallen and is now at a new low after shares lost 36c, or 2.68%, yesterday.
Telkom's stock is now trading at R13.09, taking its market capitalisation to R6.8 billion. By comparison, Vodacom - in which it once had a 50% stake - is worth R154.9 billion. The JSE's all share index lost 1.63% yesterday.
Stock in the company has slid more than 40% since the beginning of the year and is now trading at a huge discount to its net asset value, which is worth over R30 billion more than its stock. Investors are wary as the company is losing talent, has seen top-level ructions, and is lacking clear direction from government.
On Tuesday, after the market had closed, Telkom said it reached an agreement with the Competition Commission to pay a fine of R449 million that was levied against it by the Competition Tribunal last year.
Telkom was fined after the tribunal found it had abused its monopoly between 1999 and 2004, which it appealed, as did the commission, which wanted a heftier penalty. Last month, both parties dropped their appeals.
The case stems from a complaint submitted to the commission in 2002, by the then South African Value-Added Network Services (SAVA) group and 20 other Internet service providers. The complaint was around alleged price fixing and Telkom's alleged refusal to provide access to essential facilities.
The providers accused Telkom of abusing its market dominance by refusing to supply them with backbone and access facilities, unless they met its conditions. SAVA was subsequently incorporated into the Communications Users' Association of SA, which later disbanded.
The tribunal found Telkom had refused to supply essential facilities, which limited competition in the sector. It did not find enough evidence to support an excessive pricing argument.
Telkom and the commission have agreed it will settle the R449 million fine, and will pay half within six months of 12 April, with the balance due within a year-and-a-half of 12 April.
Telkom and the commission have also been in discussions to settle a different matter, which hinged on similar behaviour as the case decided last year. The case at the heart of the settlement discussions also relates to an alleged abuse of dominance.
Share