Press Releases

The Competition Commission and Telkom - 07 February 2011

COMPETITION TRIBUNAL DISMISSES TELKOMS COMPLAINTS

(Following is a guideline for journalists. The information can be used but please do not quote Nandi Mokoena or the Tribunal)

On Friday, 4 February 2011, the Competition Tribunal dismissed Telkoms attempt to quash the competition case brought against it by the Competition Commission. Regarding the case that Internet Solutions (IS) brought against Telkom, the Tribunal gave IS time to bring an amended case for Telkom to answer.

In its judgment the Tribunal found that all of Telkom’s objections, to the Commission’s allegations that it had abused its market dominance, were without merit. The Tribunal said that Telkom’s objections to the Commission’s case were either “misconceived” or “without substance”. The Tribunal also found that Telkom’s arguments on various points of law, including that the allegations against it were unconstitutional, should more appropriately be argued in the main case when that is heard.    

Background

The Tribunal’s finding follows a hearing on 11 October 2010 where Telkom argued for the dismissal of the Competition Commission and Internet Solution’s (IS) cases both parties brought against it.

On 26 October 2009 the Commission referred its case against Telkom to the Tribunal for adjudication, alleging that Telkom had abused its dominant position in the market for the provision of telecommunications network facilities. IS also referred its own complaint against Telkom and asked the Tribunal to consider it together with the Commission’s referral.  

In its investigation the Commission found that Telkom abused its near-monopoly position in the market for the provision of telecommunications network facilities. It did this by charging excessive prices for the basic infrastructure needed by its downstream competitors, the internet service providers or ISP’s, to access a range of telecommunications services, while keeping its own ISP service charges low. In this way, Telkom also raised its downstream competitors costs, making it difficult for them to on-sell cost effective services to end consumers.

In Telkom’s view, the Commission’s allegations against it were unconstitutional, vague, contradictory and did not meet all the requirements of the Competition Act. Telkom also argued that the IS case against it overlapped with the Commission’s case and was thus irregular.

The Tribunal heard Telkom’s arguments, as well as the Commission and IS’s responses in October and made its finding on 4 February. This finding now paves the way for Tribunal to hear the main cases against Telkom, namely the allegations that it has abused its market dominance. The first of these cases is set to start on 30 May 2011 and continue till 17 June 2011.

Issued By:    

Nandi Mokoena
Communications: Competition Tribunal
Cell: +27 (0) 82 399 1328
E-mail: NandisileM@live.co.za or NandiM@comptrib.co.za

On Behalf Of:

Lerato Motaung
Registrar: Competition Tribunal
Tel: (012) 394 3355
Cell: +27 (0) 82 556 3221
E-Mail: LeratoM@comptrib.co.za