Optis tries to hold up SNO process

By Paul Vecchiatto, ITWeb Cape Town correspondent

Cape Town, 01 Dec 2005

Optis, a failed bidder for the second national operator (SNO) licence, could hold up the licensing process if it does not get at least a 4.5% stake in the controlling consortium known as SepCo.

On 25 November, the Pretoria High Court deferred its judgement on Optis` legal action against the minister of communications until January. This could potentially delay the awarding of the SNO licence even further. Government officials and Independent Communications Authority of SA (ICASA) councillors have gone on record as saying they expect the licence to be awarded before year-end.

On 28 November, at least one member of the SNO consortium received a letter from Optis` lawyers stating that if it received a 4.5% stake in SepCo, it would not proceed with any further legal actions that could potentially delay the awarding of the licence.

ITWeb has seen the letter that clearly states that Optis would continue with its legal actions even if it loses the current case.

"We hold instructions to appeal such findings which will result in a further delay of the SNO process," the letter says.

The recipients of the letter cannot go on record showing it, because of an agreement between the SNO shareholders not to make any public statements on the entity itself, or the licensing process, until the licence is finally awarded.

"Optis have been going around looking for some kind of stake to stop their actions for a while," says another member of the SNO.

Headed by Alan Freidland, whose main business is Brilliant Panel Beaters in Johannesburg, Optis caused a stir in the initial bidding round when it was found to have copied another company`s presentation and that the proposed CEO, Freidland`s son, was too young at the time to sign contracts.

Friedland says that while he has not seen the letter, "if it came from my attorneys, then it was on my behalf".

He says he has been trying to resolve this issue for some time.

"I did not want to go to court with this. But no one wants to come to the table and talk," he says.

Optis` case against the minister of communications states that if it had known that the 51% controlling stake in the SNO was to be split up, then it would have re-entered its bid for the second round.

In terms of the structure announced by the minister of communications in September 2004, the SNO`s equity share capital will be allocated among six main shareholders: black empowerment group Nexus Connexion with 19%, Transtel and Eskom with 30%, CommuniTel and Two Consortium with 12.5%, and the India-based Tata Group with a controlling 26%.

SepCo is the combination of the Tata, CommuniTel and Two Consortium stakes.

ICASA councillor Tracy Cohen says the regulator is determined to go ahead with the licensing of the SNO.

"We will proceed unless there is a legal reason not to," she says.