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WirelessG sues Vodacom for failure to honour an agreement

Vodacom is set to be sued by WirelessG and six other companies on claims the mobile operator broke its shareholder agreement to offer the broadband company their “best wholesale data price”.

Vodacom has a shareholding in WirelessG and the agreement between the two stipulates that WirelessG has exclusivity on WiFi infrastructure and services in all Vodacom’s operations together with branding rights.

Another agreement prevents Vodacom and its affiliates from supplying WiFi services independently from WirelessG.

Carel van der Merwe, Chief Executive of WirelessG, told Moneyweb why the court application was filed.

He said: “WirelessG has a shareholders agreement with Vodacom which contains commercial benefits in terms of rights. Now, shareholders paid for those rights and we have tried to implement those terms without any success.

“I have escalated and raised this issue with the previous as well as the current CEO of Vodacom. Both promised a settlement and all our avenues to get these terms of the settlement agreement implemented are exhausted and we have no other satisfactory remedy at this specific stage,” he said.

Regarding Vodacom working with other companies, van der Merwe added: “We’ve got the documentation in our possession which is strategic documentation, Vodafone’s documentation, where they are implementing strategic WiFi plans in Vodacom and they will offer local and international WiFi service to their customers. So that is a Vodafone branded strategic document. That’s the first and most important document.

“Then there are other examples and cases where Vodacom did not [consult] WirelessG in running pilots and participating pilots as well as projects.”.

When asked if he would consider negotiating with Vodacom he said: “Yes, definitely. we are always willing to negotiate. I really believe that is the best way to settle this specific complicated situation. But I must also mention that I have escalated this in the past to both the previous and current CEO. Hopefully they come back this time so that we can sit around the negotiating table.”

Richard Boorman from Vodacom said in a statement that the telecoms company received the urgent court application from WirelessG in December last year.

“We’re in the process of compiling a response which is due on 11 February. The matter is then set down for hearing on 11 March 2013. Vodacom has been advised not to comment ahead of this as this may prejudice the case.”

Boorman, like van der Merwe, said that Vodacom would prefer to discuss and resolve the matter directly with WirelessG although Vodacom believes it has a strong defense to the allegations made by WirelessG.

Posted in: Internet

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