Further third cellular licence drama unfolds

Johannesburg | ITWeb, , 23 Jun 2000

Speculation is rife about the Grant Thornton Kessel Feinstein report on the third cellular licence. It is believed that the South African Telecommunications Authority (SATRA) will issue a statement later today to the effect that the report will be disregarded, as the firm is allegedly linked to one of the bidders.

Sources say SATRA made the decision based on legal advice.

Although the report was supposed to be confidential, draft copies have been leaked to bidders and the media.

It is also rumoured that SATRA head Nape Maepa has informed other councillors that he will again become involved in the last steps of the selection process. Maepa withdrew from the selection of SATRA's preferred bidder, citing distant past links to a bidding consortium. But he is rumoured to have informed the SATRA council in writing that he will once again be involved in the process.

Maepa was not among the list of nominees that the portfolio committee on communications compiled for the council of SATRA's successor, the Independent Communications Authority of South Africa (ICASA). However, SATRA councillor William Currie, who has also been involved in the third licence selection, is on the list.

ICASA will take over the functions of both SATRA and the IBA.

SATRA public affairs manager Kotli Molise could not this morning comment on the industry speculation, but said that a statement is being prepared and will be released later today.

SATRA is to make the final decision on the bidder it will recommend to minister of communications Ivy Matsepe-Casaburri, who will issue the licence. Saudi-backed consortium Cell C was named as the intended preferred bidder in February, but the council reserved the right to change that determination and has given no further indication as to which of the competing consortiums it will select.

The final preferred bidder must be named before ICASA assumes regulatory authority, as SATRA believes it is legally and morally obliged to complete the process it started.

The Grant Thornton Kessel Feinstein report was commissioned to examine an earlier analysis of bidders' financial plans. The first report, by BDO Spencer Steward, caused controversy when it was widely leaked to the media, and Grant Thornton Kessel Feinstein was tasked to examine it and subsequently submitted financial information to assist the SATRA council with its final decision.

A final recommendation was expected before the end of June, but the status of the Grant Thornton Kessel Feinstein report is expected to cause further delays.

Insiders believe the SATRA decision will be subject to court action regardless of the outcome. Bidders are said to be spending more than $1 million (over R6 million) per month on their bids while awaiting a decision.