The Competition Commission is about to finalise its investigation into the Internet Service Providers Association's (ISPA's) complaint that Telkom is engaging in anti-competitive behaviour. ISPA expects a ruling in June.
ISPA lodged the complaint against Telkom in 2005, stating that Telkom's wholesale and retail pricing structure was squeezing the margins of Internet service providers (ISPs).
The association also asked the commission to evaluate the way the South African Internet market is structured, and make sure that ISPs are able to compete fairly to provide reasonably priced services to their customers.
The Competition Commission requested four extensions during its investigation, as Telkom did not provide the authority with the information it required, says ISPA GM Ant Brooks.
However, things are now speeding up and ISPA expects a ruling soon. "I would be surprised if the Competition Commission doesn't wrap it up mid-June," he says.
Losing battle
World Wide Worx Strategy MD Steven Ambrose says he sympathises with ISPs for being charged for wholesale access by the same entity they compete with in the retail space.
However, Telkom is within its rights to charges for access, and the practice is in line with international practice, he says. "It might not be equitable, but it is a business fact," he says.
He says ISPA is engaging in a battle that it cannot win. "Until the local loop is unbundled, there is no other option. If you want ADSL access, you have to pay Telkom," he says.
Ambrose also does not hold out much hope that Neotel would provide a viable competition to Telkom in the Internet market, forcing down prices and enabling a more equitable regime.
"Despite all the regulations and high-minded intention, the clear fact is that Neotel is not a viable competitor against Telkom, as it chooses the most profitable business areas.
"They will probably come out with offerings that allow users to save a couple of hundred rands, and with slightly greater caps, but they will still leave ISPs in the cold again," he says.
Better relations
Brooks notes that the relationship between ISPA and Telkom Wholesale has improved since the association lodged its application with the Competition Commission. ISPA gets honest answers from the division on its operational queries, he says.
"We also want to think that ISPA gives Telkom Wholesale good feedback on what ISPs want," he says.
ISPA is working to establish a similar relationship with MTN and Vodacom, as both companies also provide wholesale services to ISPs, Brooks notes.
"The roadshow ISPA held in March showed that ISPs also have concerns about their interactions with the cellular providers," he says.
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