Telkom SA has agreed to pay a fine of R200 million to settle complaints that it used its dominant market position to the detriment of other internet providers.

Telkom agreed in April with the Competition Commission to pay a separate R449 million fine for using its dominant position to block competition from other network providers

At the same time, the company has announced that its headline earnings per share declined by 73.2% in the last financial year.

Headline earnings per share decreased to 87 cents. The decline was largely as a result of the cost of voluntary severance packages and a provision for the Competition Commission fine and other legal matters.

It announced in March that it would offer voluntary severance and early retirement packages to thousands of its employees. In the reporting year, operating revenue fell by 1.7% to R32.5 billion while the company’s operating expenses, excluding the impairment, increased by 2.2% to R32bn.

Telkom CEO Sipho Maseko said despite the current financial performance, there was an opportunity for the company to build a profitable and sustainable business. “I believe that Telkom is well positioned, through its unique fixed-line infrastructure and network, to facilitate the e-Enablement of our country on a commercial basis,” he said.

“We remain well capitalised and have a strong financial base to work from.” Maseko said success would require a complete transformation of Telkom. A full strategic review was currently underway focusing on medium and short-term interventions.

“Tough decisions will have to be made, particularly regarding costs and the decommissioning of unprofitable services,” Maseko said.

On the positive side, ADSL subscribers increased by 5.2% to 870 505. Active mobile subscribers increased by 3.4% to 1.5 million. Mobile data revenue increased by 123.3% to R364m while fixed-line data revenue increased by 3.6% to R10.4bn. – Additional reporting by Sapa.