Come yesterday, the South African wireless telecommunications provider Telkom is being charged with a doozy. According to Mail & Guardian, the group has to pay R200 million in administrative penalties. This is after the Competition Tribunal found evidence to substantiate that Telkom is abusing its power as the leader of telecoms facilities in the country.

It has been reported that the commission found that Telkom had engaged in what they call a “margin squeeze” – this is as a result of them over charging licensed operators or bandwidth and IPLC, (international private leased circuit).

The pricing was set at levels that precluded cost-effective competition with Telkom’s retail internet access and services available via a leased line or ADSL access.

The company in question has however agreed to “separate its wholesale and resale divisions” so that the wholesale and retail prices of products are valued at R875 million over a five year period.

The settlement however will be rejected, unless Telkom can come up with good enough reasons to substantiate and convince the commission.

The whopping R449-million fine amounted to 5% of Telkom’s market capitalisation of R9-billion – or two-and-a-half times the company’s operating profit of R179-million for the financial year ended March 31 2012.

[Source: Mail & Guardian]