Telkom has withdrawn its appeal before the Competition Appeal Court against the guilty verdict handed down to it by the Competition Tribunal in August last year.
This is according to a report which appeared in City Press over the weekend.
According to the report, the state-owned company’s R449 million fine is now back on the table, but negotiations between the two parties mean that the size of the fine is not final and could increase or decrease depending on the outcome.
The City Press reported that the Competition Commission – who brought the case against Telkom – has also withdrawn its counter appeal.
The counter appeal asked for a higher fine – to the tune of R3 billion – to be imposed on Telkom.
The competition battle
In August 2012, the Competition Tribunal imposed a penalty of R449 million on Telkom SA for abusing its dominance in the telecommunications market between 1999 and 2004 – a period in which Telkom was a monopoly provider of telecommunications facilities.
The Tribunal concluded that Telkom 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, the tribunal ruled.
Telkom admitted to the allegations, but argued that it was justified in doing so because, by providing certain value added services, the VANS providers were engaged in illegal conduct.
Telkom alleged that the VANS operators had adopted a business model that effectively trespassed on Telkom’s exclusivity rights as set out in the Telecommunications Act and in its licence.
Following the ruling, Telkom lodged an appeal against the fine (2 December 2012), which was met with a cross appeal by the Competition Commission asking for a R3 billion fine to be imposed on the company.