Telkom slams reports of shady deal

By Candice Jones for Telkom
Johannesburg, 08 Dec 2008

Telkom has hit back at weekend reports accusing company CEO Reuben September of shady dealing.

The report surfaced after Telkom awarded a tender to Telsaf Data and Ericsson to provide point-to-point split mount radio equipment. The equipment is expected to link Telkom's backhaul services to radio towers, which the company says will improve its wireless services.

The equipment is critical for Telkom. The company already leases its backhaul to the mobile providers, and is in the process of rolling out its own wireless services in the form of Go3G. Telkom has also had a long-standing relationship with Ericsson, with the companies' partnerships extending as far back as 1996.

Stringent procurement

According to Business Times, the Communication Workers Union (CWU) has called for a probe into the deal. The union is reportedly accusing the company of tweaking the tender submissions to influence which company would be awarded the tender.

Telkom explained in a media statement sent to ITWeb this morning: “Telkom finds it necessary to clarify certain matters raised in a report by a Sunday newspaper. The unfounded allegations concerning claims indicating a flawed procurement process and the alteration of documents in favour of the successful bidder are refuted by the company.”

According to the statement, the decision to award the tender to Ericsson and Telsaf was discussed with the company's executive committee. This was after the recommendation was referred by the company's procurement review council.

“Telkom's tender processes are extremely stringent. In the best interests of the company, the executive committee decided the successful bidder would best be able to provide the technical equipment required,” the statement continued.

The original tender was released in December 2007 and lists 23 critical criteria that needed to be met by any bidder. “The tender, put out by Telkom, was for the provision of a critical system to supply end-to-end solutions for point-to-point split mount radio equipment.”

He said, she said

The weekend report mentions a value of R2 billion for the deal; however, Ericsson VP for marketing and communications G"oran S"oderholm says the companies awarded the tender have not yet put a value to the deal.

Similar deals made globally by Ericsson have generally come in under R500 million. Ericsson has refrained from providing any additional comment, saying the problem belongs to Telkom.

Another short-listed bidder, Maredi Telecommunications and Broadcasting, has also reportedly complained, saying it had met all the tender requirements, while Ericsson failed its equipment test.

While Ericsson has confirmed it had to do the test twice, Telkom said this morning that Maredi did not, in fact, meet the tender requirements.

“The unsuccessful bidder, Maredi Telecommunications and Broadcasting, achieved unsatisfactory scores in certain critical categories of the tender and, as such, they were disqualified,” explained the statement.

The CWU was not able to comment on the allegations this morning.