The Competition Commission found, among other things, that several aspects of Telkom’s conduct prima facie contravened the Competition Act, 89 of 1998 and referred certain of the complaints to the Competition Tribunal for adjudication. The complaints deal with Telkom’s alleged refusal to provide telecommunications facilities to certain VANS providers to construct their networks, refusal to lease access facilities to VANS providers, provision of bundled and cross subsidized competitive services with monopoly services, discriminatory pricing with regard to leased line services and alleged refusal to peer with certain VANS providers. Telkom has brought an application in the South African High Court challenging the Competition Tribunal’s jurisdiction to adjudicate this matter.
These matters and the amount of Telkom’s liability are expected to be finalized within the next year. If these complaints are upheld, however, Telkom could be required to cease these practices and fined an amount of up to 10% of Telkom’s annual turnover or be ordered to divest itself of the relevant business. Telkom is currently unable to predict the amount that it may eventually be required to pay. If Telkom is required to cease these practices, divest itself of the relevant business or pay significant fines, Telkom’s business and financial condition could be materially adversely affected and its revenue and net profit could decline.
