This enables Telkom to squeeze the margin between the wholesale and retail price, so that competitors cannot afford to stay in business.

Similar problems exist in the wholesale market. Telkom controls access to key facilities such as international bandwidth, and to local loop access services such as ADSL.

By controlling the price that ISPs pay for these services, Telkom makes it difficult for large ISPs to compete with Telkom's wholesale offerings.

"Telkom's position as both a supplier and a competitor allows it to force other ISPs out of the market," says Greg Massel, joint-chair of ISPA.

"Fewer viable competitors means that Telkom is in a position to keep the price of services such as broadband at an artificially high level. Ultimately, the consumer is paying the price for Telkom's tactics."