A recent and surprising announcement by the South Africa Competition Commission in the ongoing saga between Orion Telekom and Telkom SA — whereby Orion accuses Telkom of abusing its market dominance and stealing its large corporate clients by offering them discounts on non-cellular telephony — has changed the situation somewhat.
Orion brought an application for relief before the Competition Tribunal last year, which was investigated by the Competition Commission. The commission has announced that it found insufficient evidence and information to support Orion’s allegations, and that it will not refer the matter to the tribunal.
Orion is not entirely happy with the commission’s announcement, and says it is struggling to understand how the evidence could be insufficient. Says Don Tredoux, MD of Orion Telekoms: “We provided the commission with detailed reports on the cancellation of Standard Bank and Edgars’ contracts with us, as a result of Telkom’s conduct. We also provided details of the markets in which we believe Telkom is competing unfairly.”
Tredoux says that the commission also alleges that it was unable to determine, from the interconnect agreements between Telkom and the cellular networks, whether Telkom was discounting its rates to the extent that it was making a loss on the lucrative discounts it offered to Orion’s clients.
Says Jacques du Toit, director at Orion Telekom: “I find the announcement ironic. The commission had the relevant information, and knew more than any man on the street. I do believe that it is actually to our benefit, though.”
Tredoux says that the company is, in a sense, pleased with the commission’s decision, because it allows Orion to take the case further, and at a much faster pace. He adds that, even if the ruling had been in Orion’s favor, it would only have been a marketing victory, but would not have had any legal impact.
“We feel more confident in our own “legal support system” and are relieved that our legal team can now drive this matter forward with the urgency that it requires,” he said. “This is not the end of the process, but rather part of the ongoing case against Telkom’s unlawful practices, which Orion will continue to run in the tribunal. Orion has been advised by its senior counsel and legal team that this is in no way the end of the matter, and that Orion’s rights to continue with the matter remain fully intact.”
Telkom notes the announcement by the commission, and says that it has always operated within the legal and regulatory framework of its PSTS licence.
Says Anton Klopper of Telkom’s legal services department: “Telkom has been vindicated in its stance that it has not acted in an anti-competitive manner in granting volume and term discounts to customers who qualify for same.”
