A legal wrangle is holding up the City of Cape Town's wireless broadband project, in a dispute that could take years to resolve.
The tender, worth between R25 million to R30 million over three years, was awarded on 12 December to a consortium consisting of network operator MTN and IT company Cornastone.
However, Telkom subsequently appealed the decision within 28 days of the tender having been awarded. Roll-out of the network could be substantially delayed as a result, notes a lawyer. None of the parties were able to shed any light on how long the matter may take to resolve.
Telkom group executive for corporate communications Lulu Letlape says the City of Cape Town is still considering Telkom's appeal, and the operator cannot comment further.
Lufuno Nevhutalu, chairman of Cornastone, says as the objection process is under way, the company cannot comment on the matter.
A lawyer in the ICT arena - who asked not to be named - says it can take weeks, months at worst, for the matter to be settled internally, depending on the efficiency of the internal processes within the City of Cape Town. However, if Telkom is dissatisfied with the resolution of the matter, it does have the right to take the matter to court, which could hold the process up for years.
MTN Network Services CEO Mike Brierley says the company cannot comment directly on Telkom's complaint regarding the bid, as the matter is between the fixed-line operator and the City of Cape Town. However, Brierley did say the matter illustrates Telkom's bullying tactics.
Telkom's objections
City of Cape Town CIO Nirvesh Sooful, who was not immediately available for comment today, previously said Telkom's objection could delay the wireless network that would service 300 municipal sites, including libraries and clinics.
Telkom's objections to the tender centre on two issues: The first is that, while the Electronic Communications Act has replaced the Telecommunications Act, the original regulations are still in force, meaning the municipality has to connect through a licensed public telephone service network.
Secondly, Telkom claims it was not informed it did not make the original shortlist and wants to know why it was not on the list.
Sooful previously said he hoped the network would be up and running by the beginning of the new financial year in July.
Pursuing independence
Brierley says the City of Cape Town tender is part of MTN Network Services' strategy of partnering with municipalities to establish wireless networks. The company, which has also bid for a City of Johannesburg tender, says it is also looking at opportunities in Limpopo, while the Ethekwini municipality has asked MTN to submit a proposal.
Wireless broadband networks allow municipalities to lower costs and operate independently of Telkom. It allows the city to leverage its assets to self-provide telecoms services, as well as increase efficiency. It also enables the city to have more efficient contact with its constituency and deliver e-government services using technology as an enabler, he says.
The Johannesburg tender, which should be short-listed in the next few months, is a 1 600-square kilometre project, he says. The City of Cape Town currently purchases access circuits from Telkom, which Brierley says is a limitation, as Telkom sets the price.
"Once the city puts up WiMax, it makes them independent, so they can sell access and upstream services, which increases competition. That is a big change."
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