Telkom must pay: WA CEO

Web Africa CEO, Tim Wyatt-Gunning, says that despite all the back and forth arguments at the competition tribunal this week, the basic fact remains that Telkom is guilty of anti-competitive behavior and should be made to pay.

Wyatt-Gunning explains that as former joint CEO of Storm, he was part of the VANS group which initially took the Telkom complaint to the Competition Commission and therefore has good insight into the anti-competitive practices which Telkom used.

“Almost a decade later, in my new capacity as CEO of Web Africa, I can categorically say that they are still up to their old tricks, albeit in a less damaging manner,” says Wyatt-Gunning.

“It is eight years since the VANS companies lodged a claim against Telkom. At the time, their routine failure to assist VANS providers and their competing unfairly on pricing had a material impact on all of our businesses, often with the result that our customers were forced either to remain with Telkom or revert back to Telkom.”

Telkom has argued that the behaviour it stands accused of no longer occurs and that the case is less relevant on account of the amount of time that has elapsed since the complaint was first brought before the Commission.

“I must point out that this is not accurate. We have lodged several objections recently to our Telkom Account Managers regarding Telkom sales agents approaching customers who are moving over to us from other ISPs with ‘special offers’,” says Wyatt-Gunning.

“While there is clearly a lot more separation between wholesale and retail than there was in 2003, we still believe Telkom Retail is not treated at a full arm’s length alongside other wholesale customers.”

Hit them hard: Wyatt-Gunning

Tim Wyatt-Gunning
Tim Wyatt-Gunning

The Competition Commission asked the tribunal to fine Telkom R1.2 billion if it was found guilty, having originally asked for a penalty of R3.5 billion, or 10% of the group’s earnings when the alleged offence occured.

In its closing statements, Telkom asked for a penalty of R20.5 million, if found to be guilty.

Wyatt-Gunning says that he wants to see the penalty match the crime and not to be lightened because ‘things have moved on’.

“Uncompetitive practices over the years have had a knock on effect today. In the absence of a punchy regulator, Telkom has dragged its feet allowing industry players to find themselves in the ludicrous position where, today, Telkom represents around 80% of our network cost base.”

“A skewed, anti-competitive landscape continues to prejudice the retail price of broadband. This is not in the best interest of the consumer and certainly not in the best interest of an economy where business input costs, like telecommunications, remain unreasonably high and continue to see this country remain uncompetitive,” Wyatt-Gunning concludes.

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Telkom must pay: WA CEO