Telkom today received a R449 million fine from the Competition Tribunal for abusing its dominance in the telecommunications market between 1999 and 2004.
Government must learn from Telkom’s punishment by the Competition Tribunal and must, in its future strategy for the telecommunications company, resist the temptation to return to monopolistic practices to dominate the market and shut out competitors.
The fine, which is considerably less than the R3,5 billion originally asked by the Competition Commission in February, must come as a relief to Telkom. I urge it not to appeal the fine and focus on becoming a market-friendly collaborator within the communications market.
Communications Minister Dina Pule must soon report her ideas on Telkom’s future to Cabinet and there is much talk of delisting the company and merging it with Broadband Infraco and Sentech to form a single state-owned communications infrastructure entity.
The temptation to use a single, government-owned communications infrastructure provider to control the sector will have negative consequences for the competitive ICT sector that South Africa desperately needs.
All three entities have dire reputations for service delivery and for being instrumental in holding back the economic potential of South Africa’s ICT sector. The process of combining competing ANC cadre-led entities into one will further inhibit South Africa’s global ICT-based competitiveness and must be resisted.
The DA cautions against using the Telkom turnaround strategy, in whatever form the government decides, to return to the monopolistic practices and pricing regimes that led to its competitors joining forces to take it before the Competition Commission.