Tribunal affirms Telkom settlement

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The Competition Tribunal's affirmation of a settlement allows Telkom to move on, says CEO Sipho Maseko.
The Competition Tribunal's affirmation of a settlement allows Telkom to move on, says CEO Sipho Maseko.

Telkom has welcomed the Competition Tribunal's formal confirmation of the settlement agreement reached with the Competition Commission, which will see it pay a R200 million fine and functionally separate its wholesale and retail units.

"This agreement marks the beginning of a new era in the communications sector and brings to a close a variety of complaints against Telkom lodged at the Competition Commission during the previous regulatory environment," the telco says in a statement.

Tribunal chairman Norman Manoim congratulated Telkom's leadership on their courage to enter into the ground-breaking agreement, which he noted as having been reached timeously and outside of litigation, said Telkom. "I think this has been an incredible agreement reached by both parties," said Manoim.

"It's certainly the most impressive consent agreement that I have seen here in my years at the tribunal and no doubt it took a lot of hard work and many hours of negotiation," Telkom quotes him as saying.

Manoim hailed the agreement as a credit to the new leadership at Telkom for creating an environment where such an agreement could be reached, and a credit to the commission for having the sophistication to negotiate an agreement of this complexity, said Telkom.

Telkom CEO Sipho Maseko said he was encouraged by the comments by the Competition Tribunal chairman.

"We believe that the conclusion of this agreement is an essential element of our transformation journey. It will allow the company to move beyond legacy complaints and litigation that have been a drag on performance, strategic focus and sound partnerships, and which occupied the attention of senior executives for a long period.

"Concluding the agreement enables Telkom to focus on aspects of the business that are critical to its future success. These include improving the profitability of the business, enhancing the service that customers deserve and ensuring the long-term commercial sustainability of the company," said Maseko.

Telkom will now focus on implementation of all the provisions of the agreement and the compliance processes Telkom has committed to put in place.

Telkom is committed to complying with both the spirit and letter of the agreement. The agreement makes provision for annual internal audits to confirm compliance, and a first independent audit to be completed within six months of the confirmation date.

The company believes the impact of the agreement over time will benefit providers of various communications services as well as consumers.

The key aspects of the agreement include the functional separation of Telkom's wholesale and retail business operations. This will include instituting a transfer pricing process, separate internal accounts for specified products and improving the behaviour of employees of the company through a code of conduct.

Telkom is confident these mechanisms provide a high level of transparency to all parties in the ICT sector and marks the beginning of a new era for the company.

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