MTN says ‘we’ll call you’ after court rules in Vodacom’s favour
LESS than two weeks after advertising authorities ruled in MTN’s favour, Vodacom has won the latest round in the battle between SA’s two biggest mobile operators.
MTN’s court bid to have Transnet’s R325-million deal with Vodacom set aside was dismissed on Monday, three days after the High Court in Johannesburg heard the matter.
Competition among mobile network operators, including in the enterprise segment, is intensifying amid a decline in traditional voice revenues.
MTN said in its court papers that it wanted Transnet’s contract with Vodacom, which was signed in February and involves the provision of mobile voice and data services, to be set aside as the tender process had been “marred with irregularities”.
The mobile operator, which has provided these services for years, has thus far refused to port Transnet numbers to Vodacom on the premise that both the first and second iterations of the tender process were irregular and skewed in its rival’s favour. Its refusal to hand over the services is despite a ruling in April by the Independent Communications Authority of SA (Icasa) that it must do so.
Vodacom said in its court papers that it was losing “hundreds of thousands of rands in revenues per day” as a result of MTN’s non-compliance.
It was unclear on Monday whether MTN would contest the ruling or accept it and hand the services over to its larger rival in the South African market.
MTN was “studying the judgment”, a spokesperson for the company said.
The initial tender was launched in late 2015, but after Vodacom was identified as the preferred bidder, the process was called off early last year.
This after an independent report on behalf of Transnet, by forensic investigators Ligwa Advisory Services, recommended that the state-owned company redo the tender as it had discovered “anomalies” and “irregularities”.
Transnet told both Vodacom and MTN in March last year it was calling off the tender as neither party’s submission kept to its guidelines.
Soon after Transnet relaunched the bidding process, MTN was disqualified because it had written “N/A” (not applicable) in the tender documents next to the devices it could not supply Transnet instead of writing “R0” (zero rand).
Cell C’s submission was also deemed ineligible by Transnet’s procurement team, leaving Vodacom as the only permitted bidder.
Following the protracted tender process, Vodacom won the contract, which was priced at R325-million over three years.
MTN said in its court papers that the process followed “indicates that the award of the tender to Vodacom was a fait accompli”.
“There is simply no difference between a bidder who inserts the words ‘R0’ and one that inserts ‘N/A’ next to an unavailable device,” MTN said.
However, confirming an earlier external investigation on behalf of Transnet’s procurement ombudsman, the high court on Monday found that the award of the tender to Vodacom was free of irregularities.
“The contract concluded between Transnet and Vodacom pursuant to the award of the tender was validly concluded and therefore lawful,” a Vodacom spokesperson told Business Day.
Transnet said in its court papers that its decision to disqualify MTN was “rational” and that it had used a different supply chain management team for the second tender.
Meanwhile, in early June, the Advertising Standards Authority of SA ruled in MTN’s favour, saying Vodacom must withdraw claims that it had the “best network for three years in a row”.
This was after network tests by Ookla showed MTN had taken over as SA’s fastest network.