The AfricaSpeaks consortium ranked fifth out of the six contenders when the South African Telecommunications Regulatory Authority (SATRA) released its evaluation of the bidders for the third cellular licence.
But in a lengthy submission to the Authority, AfricaSpeaks says the recommendation of Cell C should be reversed, and it is also asking the government to take a long hard look at SATRA.
The representation accuses SATRA of failing to apply its mind to the content of applications and states in no uncertain terms that the entire evaluation process was flawed. "In evaluating the applications SATRA did not fully take into account certain objectives of the Act and in some instances disregarded the law," one part of the document reads.
Other bidders were given until yesterday to submit their representation on the choice of Cell C to SATRA. The Authority is to make its final representation to Communications Minister Ivy Matsepe-Casaburri by the end of the month. Government is generally expected to accept the recommendation and approve the issue of a licence.
AfricaSpeaks, however, is calling on government to reject the recommendation and investigate the selection process. The consortium has pointed out internal inconsistencies in the SATRA recommendation report, which, it says, points to clear bias in favour of Cell C.
The submission does not refer to the BDO Spencer Steward report, commissioned by SATRA to analyse the individual business plans of bidders. That report, leaked to the press before the recommendation was made public, casts doubt on the financial plan proposed by Cell C.
"From 2000 to 2005 the company is technically insolvent, its net liabilities exceeding net assets," the report reads. It also raises doubt on the empowerment structure the company plans and says previously-disadvantaged shareholding will probably be diluted if the company lists on the JSE within 18 months, as it plans.
The report is far more positive on the business plans of runners-up Telia/Telenor and Nextcom and finds the financial structure of AfricaSpeaks "sound".
AfricaSpeaks refrains from suggesting a reason for SATRA`s "irrational and objectively unjustifiable" decision, but conspiracy theories abound. These range from the usual greased palms to clandestine arms deals. According to the latter, the government will allow Saudi Oger, which holds 60% of Cell C, access to the lucrative cellular market in return for a significant weapons export contract to be sourced in SA.
SATRA public affairs manager Kotli Molise says all six consortiums made submissions before the deadline. "For all intents and purposes they will be public," she says, "but there is still the problem of business plans, which are considered confidential."
The SATRA council is expected to make a determination on the matter soon.
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