Maredi in Court Over Telkom Deal

South Africa's Maredi Telecommunications and Broadcasting has blocked Telkom from awarding a multimillion-rand tender to Ericsson South Africa and Telsaf Data by filing an urgent court application in the Pretoria High.

South Africa’s Business Times reports that the row has called into question Telkom CEO Reuben September's close business relationship with Ericsson's senior management. Parties crying foul over the tender include the Communication Workers' Union (CWU), which has since called for a probe into alleged corruption. The union said it had evidence that senior directors at Telkom altered documents to influence the tender. Telkom has denied allegations of any wrongdoing.

In court papers, Maredi Telecom and Broadcasting CEO Takashi Utsunomiya claims Telkom violated the Promotion of Administrative Justice Act, which deals with fair awarding of contracts by entities with a significant government shareholding. Utsunomiya said Telkom violated the Act because it acted capriciously and in bad faith and did not follow fair procedures. He said Ericsson did not comply with critical criteria as it twice failed physical tests in the tendering process performed in conjunction with a Telkom team led by technical manager Giel Laubscher.

But it is understood that Marius Mostert, Telkom's group executive for network infrastructure provisioning, overruled Laubscher's critical report about the equipment and said Ericsson should get another chance because its equipment had been damaged while in transit from Sweden. Utsunomiya said his company offered Telkom a technology that meets local and international standards, at "very competitive commercial terms and within a model that advances black economic empowerment".

The tender for a point-to-point microwave system was awarded to Telsaf Data and Ericsson in a 60:40 split. The microwave serves as the back-haul system for mobile base stations and Telkom's broadband wireless access network. Telkom confirmed to Business Times that it had received a court application to review and set aside an award for the tender. Since the matter is sub judice, Telkom cannot divulge any further information, said Telkom spokesman Pynee Chetty.