South African telecommunications operator Telkom is expected to pay its full ZAR449 million (US$48 million) fine after the company withdrew its appeal from Competition Appeal Court and faces a second hearing.
Originally charged in August 2012 by the Competition Tribunal for anti-competitive behaviour, the Competition Commission has also withdrawn its complaints, after aiming for a more severe fine of ZAR3.5 billion (US$387 million).
The amount fined adds up to a 6.3 per cent share of Telkom’s ZAR7.1 billion (US$768 million) market capitalisation, exceeding its operational profit of ZAR179 million (US$19.4 million) for the financial year ended this year by more than double.
Shan Ramburuth, commissioner at the Competition Tribunal, said Telkom took a step towards resolving matters with the tribunal at a press briefing last week, the City Press reported.
A second complaint against the operator is now under discussion, based on Telkom’s rebellious reaction to the commission’s judgement.
The hearing, based mainly on the charges filed by Internet Solutions, the Internet Service Provider’s Association, MWeb and MTN, will proceed in June 2013.
Telkom’s original accusation rests on charges of abuse regarding its dominance between 1999 and 2004 by overpricing, taking part in price discrimination and declining to give access to essential facilities, inhibiting the performance of other role players in the market.
According to the tribunal Telkom’s appeal was “without merit whatsoever”.
The investigation by the commission has been ongoing for seven years, finally completed by February 2004.
“Whilst Telkom is fully entitled to pursue its rights as a litigant, it would be most unfortunate if the hearing of the matter was delayed to decide this point as an interlocutory matter,” the tribunal outcome stated.
