Telkom searches new lows
Telkom consolidated below R13 in lunchtime trade on the JSE on Thursday (18 April), after the group reached an agreement with the Competition Commission to pay a fine of R449-million for anti-competitive behaviour, earlier this week.
By 13h00 on the JSE, shares in Telkom lost 21 cents or 1.6% to R12.88, marginally better than an intraday worst level of R12.68.
The group’s market cap has sunk to R6.71 billion, and it’s come off a 52 week high of R24.70.
Shares in Telkom also declined 2.68% on Wednesday, to R13.09.
The All Share Index, meanwhile, showed signs of a recovery after a difficult week thus far, adding 0.12% to 37,848 points.
In August 2012, the Competition Tribunal imposed penalty of R449 million on Telkom in its case against the South African Value added Networks Services (SAVA).
The Tribunal concluded that Telkom had leveraged its upstream monopoly in the facilities market to advantage its own subsidiary in the competitive value added network market – Telkom’s conduct caused harm to both competitors and consumers alike and impeded competition and innovation in the dynamic VANS market.
To put the affects of the fine into context, Telkom could only manage an operating profit of R222 million for the six months ended 30 September 2012.
To compound the group’s misery, Telkom advised on April 8, that headline earnings per share for the year ended March 2013 are expected to be at least 20% lower than the 324.7 cents recorded in the prior year.
While shares in the group were briefly buoyed by the appointment of Sipho Maseko and Dr Brian Armstrong as the new CEO and COO last month, government continues to dither on a way forward for the group, after it scuppered a potential deal between KT Corp and Telkom in May 2012.
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Telkom and Competition Commission reach agreement
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