Telkom is expected to file its answer today to an Orion Cellular application to disclose its contracts with certain large corporations. The contracts allegedly offer bulk discounts over a range of products, including cellular and data services.
Orion Cellular, which supplies least-cost routing (LCR) to large corporations, filed an interdict application against Telkom with the Competition Tribunal in April. It claimed that Telkom was using anti-competitive measures to gain market share.
LCR is achieved through dedicated circuits, or through a data terminal interface device connected to a company PABX or private telecommunications network that dials or links directly into a mobile telecommunications network and circumvents Telkom`s network.
Telkom claims that LCR is illegal and it is the central issue in a separate case that was heard in the Pretoria Supreme Court last week. Judgment is expected to be handed down sometime next month.
Central to Orion Cellular`s case is the nature of the contract between Telkom and two of the cellular company`s clients. Orion Cellular alleges that the contract offers the corporations a bulk discount on a wide range of services if they stop using its LCR service.
Orion Cellular MD Don Tredoux says: "Our LCR can save the corporations more than 30% of their current bill. The best offering Telkom can make is 27% off its listed price due to interconnect agreement with the cellular network providers. However, Telkom is able to offer them bulk discounts on other services, because they have to use the them anyway."
Telkom fought not to have details of its contracts made public as it apparently claimed they were only for specific clients. However, lawyers for Orion Cellular, who have seen the documents, say they are "extremely relevant and are the smoking gun in this case".
Orion Cellular also contends that whether or not LCR is legal, the fact remains that a market has emerged for it and Telkom`s practices are anti-competitive. Orion Cellular also says the mere fact that these contracts are for specific large corporations and are not made available to the public are further indications of the anti-competitive practices.
At the time of publication, neither Telkom nor its legal representative could be reached to confirm whether the answer would be filed with the Competition Tribunal today.
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