MTN vs Vodacom battle is far from over
MTN wants to appeal against a judgment that set aside its objections to a Transnet tender awarded to Vodacom earlier this year
The long drawn-out tussle between SA’s two biggest network operators over the provision of mobile voice and data services to Transnet could be far from over.
In June, MTN’s court bid to have Transnet’s R325m deal with Vodacom set aside was dismissed by the high court in Johannesburg.
But MTN is adamant that Transnet’s awarding of the tender to Vodacom was irregular and unlawful, and the operator has applied for leave to appeal against the judgment.
MTN has provided Transnet with mobile voice and data services for years. It has been reluctant to let go of the contract and to port Transnet’s numbers to Vodacom — a process that would be painstaking to reverse if the operator were to win an appeal. As a result, MTN has been dragging its feet for months — Transnet awarded the contract to Vodacom as far back as February.
According to a Vodacom spokesperson, who asked not to be named, MTN has ported only about half the number of lines it ought to have, a move that defies the high court ruling as well as a separate directive by the Independent Communications Authority of SA for it to do so.
Transnet has now initiated an urgent application to force MTN to comply with the regulator’s number-porting orders, and Vodacom has applied to join the application as an interested party.
Vodacom hadn’t received any appeal papers from MTN by early last week, the company’s spokesperson says.
Transnet spokesperson Molatwane Likhethe confirms that MTN has not yet ported all numbers, and that the mobile operator had told the state-owned rail operator in the third week of July that it wanted to lodge an appeal against the high court ruling.
The court had declared that the awarding of the contract to Vodacom "was free from any irregularities and validly awarded", Likhethe says. He says Transnet’s court application to compel MTN to port the remaining numbers was heard on July 27 and 30. Transnet is awaiting judgment on the matter.
In earlier court papers MTN claimed that Transnet’s tender process was "marred with irregularities" and that the rail operator’s procurement team had been intent on giving the contract to Vodacom.
Vodacom said in its response that MTN’s refusal to play ball was costing it "hundreds of thousands of rands in revenue losses per day".
The tender process has been dragging on for years, with MTN claiming throughout that it has been unfairly treated.
The initial tender process was launched as far back as 2015, though it was called off in early 2017 after MTN raised concerns about irregularities. Then MTN was disqualified from the next procurement process because it wrote "N/A" in the tender documents next to the devices it could not supply Transnet instead of writing "R0" (zero rand).
However, after the first tender was scuppered, Transnet warned that it would be strict about adherence to its tender guidelines. An external investigation on behalf of Transnet’s procurement ombudsman found that the rail company had acted lawfully by disqualifying MTN on that seemingly petty transgression.
Smaller rival Cell C’s submission was also deemed ineligible, leaving Vodacom as the only permitted bidder and the ultimate winner of the contract, which was priced at R325m over three years, the court papers show.
An independent report on behalf of Transnet by forensic investigator Ligwa Advisory Services, which surfaced for the first time as part of the court process, recommended that Transnet redo the 2015 tender process due to "anomalies" and "irregularities".
Ligwa’s 2016 report found that to items for which Vodacom had not allocated a price in its submission (for which it should have been disqualified, Ligwa said), Transnet’s procurement team had ascribed "nil" value, leading to Vodacom’s prices being lower than MTN’s.
Ligwa also found that Transnet’s negotiating team was not appointed properly and did not include staff from the rail operator’s commercial unit, while there was also evidence of unapproved correspondence directly between Transnet’s Sibusiso Mthembu and Vodacom.
While only one negotiation meeting was held with MTN, two were held with Vodacom, and no minutes were taken for the second, and Mthembu failed to sign the attendance register.
Mthembu also shared information about MTN’s existing contract with Vodacom that would probably have influenced Vodacom’s pricing in its submissions, Ligwa said.
Further, the pricing and evaluations methodologies were changed through the process.
Ligwa recommended that Transnet consider carefully whether to award the deal to Vodacom, and also recommended looking into "corrective measures" against Mthembu.
SA’s two biggest mobile operators have been at loggerheads over other issues in recent times.
In early June, the Advertising Standards Authority of SA ruled in MTN’s favour, saying Vodacom had to withdraw claims that it had the "best network for three years in a row". This came after network tests by Ookla — a web service that provides performance metrics — showed that MTN had taken over as SA’s fastest network.