Telkom shores up its defence

Telkom, through the Competition Tribunal, has summonsed more than 57 key telecommunications personalities as it attempts to stave off charges that it abused its market dominance during the early part of the last decade.

This has been labelled as another attempt by Telkom to delay or muddy the charges against it by some of those who have been subpoenaed.

Should Telkom be found guilty of the charge, it could be fined up to 10% of its turnover. For 2011, Telkom posted a drop in operating revenue of 5.2% to R33.338-billion as its earnings per share plunged by 35.2% to 444.9c.

Among those who have been summonsed are MTN SA managing director Karel Pienaar and the entire board of MTN Business Solutions, as some of them were members of Verizon's board, the formerly US-owned value-added network service that was bought by the country's second-largest network operator in 2008.

Also being summonsed is the entire board of the Cape Town-based technology incubator, the Band Width Barn, members of the Internet Service Providers Association of SA and a raft of small internet service providing entities.

Telkom's summonses also ask supply documentation that stretches back to the late 1990s to include board minutes, memoranda, market studies, marketing material, pricing and a long list of other information that may have some relevance on the matter.

The tribunal has set two sessions to hear the complaint. The first is scheduled to run from October 17 to 28 and the second from December 1 to 9.

The case was originally lodged in 2002 and relates directly to Telkom's behaviour from 1999 to that date. Since then, Telkom has used a number of tactics to either have the case dismissed before it was heard or delay it indefinitely.

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 ISPs, to access a range of telecommunications services, while keeping its own ISP service charges low.

Telkom's view was that 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 Internet Solutions' case against it overlapped with the commission's case and was thus irregular.

In February, the tribunal dismissed Telkom's attempt to quash the case, labelling its objections as "misconceived". - I-Net Bridge