Optis blames Siemens for bid 'plagiarism`

Johannesburg, 09 Jan 2003

The Optis Telecommunications consortium, one of two bidders aiming to control SA`s second national fixed-line telephone network, has blamed equipment vendor Siemens for the apparent plagiarism of parts of its bid document.

In December, Joseph Okpaku, chairman of Optis` competitor Goldleaf Trading, said parts of the bid Optis had submitted were taken verbatim from material over which he held copyright. Okpaku said the material had been drawn from a cellular licence bid in Mozambique in which he had been involved. The Optis bid, which was riddled with errors, at times referred to Mozambique rather than SA.

Optis and Goldleaf are the only bidders for a 51% stake in the second national operator (SNO), due to start competing with Telkom this year.

At the time the allegations were made, Optis shifted the blame to independent consultants it said had been responsible for preparing the bid. But in a written submission to ICASA, the Independent Communications Authority of SA, the group blames Siemens, which was responsible for preparing the bid.

In a letter to ICASA, Optis chairman Alan Friedland says Siemens had agreed to prepare the consortium`s bid free of charge, but suddenly demanded a payment of R2.7 million to complete the document "a few weeks" before the document was due to be submitted. The demand was refused, he says, and "Optis submitted the relevant documents that had been prepared by Siemens as the documents then stood".

Optis offers a statement by Stanley Phekani, employed by Siemens until December, to back the assertion. According to Phekani, the information Siemens had supplied to Optis by the time the agreement was terminated was "based almost entirely on the Siemens` database of previous bid assistances and applications, including the Mozambique second GSM licence application".

Siemens has said it had not officially supported the Optis bid and started an internal investigation into the issue in December. The company would not immediately comment on the Optis statements, but Pete da Silva, COO of Siemens Telecommunications, pointed out that Phekani resigned from Siemens when the investigation was launched.

Tangling with Optis

Siemens is one of a growing number of companies that have tangled with Optis. At ICASA hearings into the Optis and Goldleaf bids in December, Optis trumpeted what it described as a partnership agreement with Internet service provider UUNet.

However, UUNet commercial director David Meintjes says there had been nothing but exploratory discussions between it and Optis on the day before the ICASA hearings.

"There is no agreement between us and Optis," he says.

Cellular provider Cell C has also questioned several of Optis` claims. In its bid, Optis makes reference to Cell C and "Homezone", a product Cell C had been considering before its launch, as one of the products it would like to offer. However, Cell C says there is no relationship between itself and Optis, and that no discussions had taken place prior to the bid being submitted.

Bid 'clarification`

In its new submission to ICASA, Optis presents what it terms a "clarification document" and a "masterwork" - a 53-page substitution bid.

Among other issues, the document attempts to address criticism that more than 80% of Optis is controlled by a handful of South African individuals with no experience in telecommunications.

Shanghai Telecom, a subsidiary of China Telecom, owns 6% of the consortium. Optis promises this will change and Shanghai will become the majority owner of the group, but only after it wins its bid for control of the SNO.

The new bid also clarifies how Optis sees control of the SNO being split. According to the document, the SNO`s board of directors will be appointed by shareholders "according to their associated voting rights", leaving Optis in control of the company. However, at the ICASA hearings last month, Optis` largest shareholder Warren Friedland said it would split voting power equally between itself and Transtel, Esi-Tel and Nexus, which are to jointly own 49% of the new company.

Not addressed in the Optis document is a question from ICASA that has been puzzling many: how the consortium had been formed. Also notable for their absence are the financial statements of all consortium partners from the last three years, as requested by ICASA.

The regulator is due to recommend its preferred bidder to communications minister Ivy Matsepe-Casaburri this month or during February.