Communications minister Ivy Matsepe-Casaburri today said she agreed with the regulator`s recommendation that neither Goldleaf Trading nor Optis Telecommunications be awarded a stake in SA`s second fixed-line telephone company.
In doing so, she may have triggered a legal battle reminiscent of that which delayed the third cellular licence. Goldleaf immediately said it would turn to the courts to halt the selection process and it could demand a full judicial review of the process to date.
Matsepe-Casaburri said she had accepted the recommendation by the Independent Communications Authority of SA (ICASA), which found both bidders unequal to the task of running the second national operator (SNO).
"I concur with their recommendation not to award the stake to any of the bidders," she said.
The announcement comes only days after the ICASA recommendation, which roundly dismissed both bidders on a number of grounds.
ICASA also recommended that the ministry start the process to issue a licence to the parties that are to make up 49% of the SNO: state enterprises Esi-Tel and Transtel, and black empowerment group Nexus.
The minister, however, would not commit to that course of action, saying she would consider the matter and that a number of options were open to her.
"We can do several things," she said, identifying a quick auction process or a longer search for a strategic equity partner as possibilities.
An SNO office has been established within the Department of Communications and the minister is also to put in place a team of advisors to consider the available options.
Matsepe-Casaburri expressed some doubt that the government would consider implementing the full ICASA recommendation, which calls for the 51% stake for which Goldleaf and Optis were bidding to be warehoused while the SNO is established.
"The law does not allow for a temporary licence, but we have been taking council on this."
She said that a decision on an alternative process would be announced in 45 to 90 days, and that speed is of the essence as SA consumers wanted to see competition to Telkom introduced as soon as possible. "But we can`t be reckless about it."
The minister admitted the lack of suitable bidders to control the SNO was a blow, but said it could have some positive aspects.
"In a way it has evened the scores out, put everyone on their toes, but it does mean we have more work to do than ever before," she said.
Goldleaf goes to court
The recommendation was apparently fully expected by Goldleaf, which had a prepared statement saying it would go to court to halt the process.
"Goldleaf had requested the minister, in writing, to delay announcing her decision, to afford Goldleaf the opportunity to make representations regarding its belief that the ICASA decision to recommend that Goldleaf not be awarded the stake was fatally flawed," the consortium said.
The deadline it identified was 10am today, two hours before the minister`s announcement.
As a result of the announcement going ahead, Goldleaf said, it will now file papers with the courts "to call a halt to the process of licensing the SNO".
"Goldleaf has been forced to take this drastic step as all other remedies available to the consortium have been eliminated."
Matsepe-Casaburri said she was not aware of any communication between either of the bidders and her office.
Share