S.Africa fines Telkom $55 mln for "bullying"
* Fine of R449 mln vs R3.5 bln originally sought
* Regulator says Telkom impeded competition
(Recasts, adds analyst comment)
JOHANNESBURG Aug 7 (Reuters) – South Africa on Tuesday
slapped fixed-line operator Telkom with a
lighter-than-expected fine of 449 million rand ($55 million) for
using its dominant market position to “bully” potential
competitors.
The result is likely to be seen as a victory for Telkom.
South Africa’s competition watchdog, which first lodged the
complaint in 2004, originally sought a fine of 3.5 billion rand,
which the struggling company has said would be “catastrophic”
and jeopardise its business.
The Competition Tribunal, which rules on anti-trust
complaints, said Telkom exploited its position as South Africa’s
dominant player in telecoms to block competition from other
network service providers.
“Telkom impeded the growth of its competitors and retarded
innovation in the market place,” the Tribunal said, adding that
“Telkom bullied its downstream competitors into line”.
Shares of Telkom, which were down more than 3 percent before
the release of the judgement, pared losses after and were down
1.1 percent at 17.85 rand at 0843 GMT.
“Telkom had to be fined something to make it politically
equitable and for the Competition Tribunal not to be seen as
unfair,” said Dobek Pater, a telecoms analyst at consultancy
Africa Analysis.
“It’s probably an optimal way out for all parties.”
Stung by declining fixed-line usage and an expensive, failed
attempt at expansion into Nigeria, Telkom has been struggling to
craft a convincing turnaround plan.
South Korea’s KT Corp last year offered to buy
20 percent of Telkom in a deal that was eventually scuppered by
South Africa’s government after
Category: Africa News
