Telkom defiant as case winds down

While under fire, telecommunications group, Telkom (TKG), has welcomed the fact that its abuse of dominance case is coming to an end, yet the group remains defiant that its conduct had no anti-competitive effect in the market.

By 13:00 on the JSE, shares in Telkom declined 33 cents or 1.20% to R27.12, having slipped 2.7% on Tuesday.

Telkom has again appeared before the competition tribunal on Wednesday (February, 15), faced with accusations of anti-competitive behaviour and abusing its power and market position in a case dating back to 2004.

The Competition Commission has asked the tribunal to find the group guilty of excessive pricing and wants the company to be fined R3.5 billion – approximately 10% of its earnings.

If found guilty, the Competition Act stipulates that an administrative penalty would go into the National Revenue Fund.

“Telkom welcomes the fact that this long-running matter is now in its closing stages. The evidence in the matter was presented during two periods of the trial during October and December last year,” the embattled group said.

“Once closing arguments have concluded… the Tribunal will stand down to consider all the evidence and arguments presented and will then in due course deliver its ruling. It is not clear how long the Tribunal may take to deliver its ruling,” Telkom said.

It said it has consistently held that the conduct complained of was fully justified in terms of the regulatory and legislative environment prevailing at the time, and that it’s conduct had no anti-competitive effect in the market.

“The Competition Commission has argued for an administrative penalty of between R1 billion and R3.5 billion, however, Telkom has argued that even if it is in due course found by the Tribunal to have contravened the Competition Act, such a penalty is not justified in the particular circumstances of this matter,” the telecoms group said.

It also argues that the full 10% penalty allowed by the Competition Act should not be imposed if all factors contemplated in the Act are duly considered.