South Africa’s Telkom Fined $55 Million for ‘Bullying’ Competition
Cape Town. South African fixed-line operator Telkom was fined 449 million rands ($55 million) on Tuesday by anti-trust regulators for abusing its monopoly by bullying competitors.
The Competition Tribunal found the wholesale bandwith provider had “bullied its downstream competitors into line” by freezing their networks and had encouraged the independent providers’ customers to turn away.
“We have concluded that during the complaint period 1999 to December 2004, Telkom refused to supply essential facilities to independent VANS [Value Added Network Services] providers and induced their customers not to deal with them,” said the tribunal ruling.
“Telkom’s conduct caused harm to both competitors and consumers alike and impeded competition and innovation in the dynamic VANS market” which includes Internet services, it added.
The fine is a shadow of the 3.2 billion rands suggested by the Competition Commission and less than two percent of Telkom’s turnover for 2010-2011, with half to be paid within six months and the rest within a year and a half.
The South African government is the largest shareholder in Telkom which is the country’s biggest fixed-line operator.
Faced with stiff competition among mobile and Internet companies, it has suffered as it tries to broaden its products and expand into the rest of the continent.
The complaint was first referred to the tribunal in 2004 but was delayed by legal challenges. It was brought by the South African Vans Association and 20 internet service providers with complaints dating to 1999.