7 December 2009 by

Telecommunications providers under scrutiny

Alongside the ongoing review by the Parliament Portfolio Committee on Communications into high interconnection rates in the telecommunications sector, the Competition Commission has confirmed that it is conducting a number of investigations into the conduct of cellular phone operators. The Commission is investigating three interrelated complaints, all of which relate to collusive activity regarding the rates charged by operators. The investigation will not be limited to interconnection rates (the rates operators charge one another and other operators to carry calls on their networks) but will include other areas such as retail pricing. In an attempt to further inform its investigation, the Commission announced that it has subpoenaed key people in the telecommunications industry to provide information related to the allegations.

Meanwhile, the Commission has referred a complaint of abuse of dominance against Telkom to the Tribunal for adjudication. This follows a number of ongoing complaints brought by Internet service providers (ISPs) that Telkom has been abusing its near-monopoly in the provision of network facilities, which are required by ISPs. The Commission alleges that Telkom has been favouring its own ISP provider with cheaper prices than those afforded to its competitors in that market, making it difficult for them to on-sell cost-effective services.

Although the Commission during its investigation, apparently worked closely with the sector specific regulator for telecommunications, the Independent Communications Authority of South Africa (ICASA), it is expected that Telkom will again raise the question of whether the Competition Authorities have concurrent jurisdiction with ICASA over competition matters affecting the industry, or whether the issue falls exclusively within ICASA's domain.

Chris Charter, Director, Competition
Pia Harvey, Senior Associate, Competition

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