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18 July 2013

Telkom welcomes Competition Tribunal confirmation

Telkom has welcomed today's formal confirmation by the Competition Tribunal of the settlement agreement reached between the company and the Competition Commission on 14 June 2013, which has been made an order of the Competition Tribunal.

This agreement marks the beginning of a new era in the communications sector and brings to a close a variety of complaints against Telkom lodged at the Competition Commission during the previous regulatory environment.

Mr Norman Manoim, the Competition Tribunal Chairperson, congratulated Telkom’s leadership on their courage to enter into the ground-breaking agreement, which he noted as having been reached timeously and outside of litigation.

"I think this has been an incredible agreement reached by both parties," said Mr Manoim.

"It's certainly the most impressive consent agreement that I have seen here in my years at the Tribunal and no doubt it took a lot of hard work and many hours of negotiation."

Mr Manoim hailed the agreement as a credit to the new leadership at Telkom for creating an environment where such an agreement could be reached, and a credit to the Commission for having the sophistication to negotiate an agreement of this complexity.

Telkom GCEO, Mr Sipho Maseko, said he was encouraged by the comments by the Competition Tribunal Chairman.

"We believe that the conclusion of this agreement is an essential element of our transformation journey. It will allow the Company to move beyond legacy complaints and litigation that have been a drag on performance, strategic focus and sound partnerships and which occupied the attention of senior executives for a long period.

Concluding the agreement enables Telkom to focus on aspects of the business that are critical to its future success. These include improving the profitability of the business, enhancing the service that customers deserve and ensuring the long-term commercial sustainability of the company," said Mr Maseko.

Telkom will now focus on implementation of all the provisions of the agreement and the compliance processes Telkom has committed to put in place.

Telkom is committed to complying with both the spirit and letter of the agreement. The agreement makes provision for annual internal audits to confirm compliance, and a first independent audit to be completed within six months of the confirmation date

The company believes that the impact of the agreement over time will benefit providers of various communications services as well as consumers.

The key aspects of the agreement include the functional separation of Telkom's wholesale and retail business operations. Amongst others this will include, instituting a transfer pricing process, separate internal accounts for specified products and improving the behaviour of employees of the company through a code of conduct.

Telkom is confident that these mechanisms provide a high level of transparency to all parties in the ICT sector and marks the beginning of a new era for the company.

For further enquiries, please contact:

Pynee Chetty

Senior Specialist: Media Relations

Group Communication

Tel:+27 12 642 1716

Mobile: +27 81 389 7874

Email: chettpr2@telkom.co.za

OR

Leigh-Ann Francis

Specialist: Media Relations

Group Communication

Tel: +27 12 642 1728

Mobile: +27 81 391 4780

Email: francilm@telkom.co.za

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ABOUT TELKOM:

Telkom is a leading communications services provider in South Africa. We had consolidated operating revenue of R16.8 billion and normalised profit after tax of R1, 683 million for the period ended 30 September 2015. Total assets amounted to R41.9 billion and equity attributable to the owners of Telkom to R23.5 billion as of 30 September 2015. The group generated normalised free cash flow of R1.4 billion for the period ended 30 September 2015.

As of 30 September 2015, we had approximately 3.3 million telephone access lines in service and 1,030,441 ports connected via MSAN access. We offer business, residential and payphone customers a wide range of services and products, including:

  • fixed-line retail voice services using PSTN (Public Switched Telephone Network) lines, including ISDN (Integrated Services Digital Network) lines, and the sale of subscription based value-added voice services and calling plans;
  • fixed-line customer premises equipment rental and sales services both voice and data needs and these include PABX, Computers, Routers, Modems, Telephone handsets and other ancillary equipment;
  • interconnection services, including terminating and transiting traffic from South African mobile operators, as well as from international operators and transiting traffic from mobile to international destinations;
  • fixed-line data services, including domestic and international data transmission services, such as point-to-point leased lines, ADSL (Asymmetrical Digital Subscriber Line) services, packet-based services, managed data networking services and internet access and related information technology services;
  • Data Centre Operations includes e-commerce, application service provider, hosting, data storage, e-mail and security services;
  • W-CDMA (Wideband Code Division Multiple Access), a 3G next generation network, including fixed voice services, data services and nomadic voice services;
  • mobile communication services, including voice services, data services and handset sales through our mobile navbar-brand called Telkom Mobile;
  •  information and communication services including cloud services, infrastructure services, workspace services, global service integration management and hardware and network equipment sales locally, in seven African countries, the UK and Dubai through Business Connexion Group; and
  • other services including directory services, through Trudon (Pty) Ltd, wireless data services, through Swiftnet (Pty) Ltd.

Convergence is one of our key strategic initiatives in building a sustainable future for Telkom.  We will lead the provision of converged services in South Africa in support of our mission statement: Seamlessly connecting people to a better life.