South Africa-Telecom:

Lawsuit questions Ericsson contract

subscriber | 20 January, 2009

JOHANNESBURG. Swedish telecom company Ericsson has been embroiled in a lawsuit challenging its right to a multi-mullion rand tender by South African Telkom. Last week, Maredi Telecom and Broadcasting filed an urgent court application in the Pretoria High Court in a bid to stop Telkom awarding a multimillion-rand tender to Ericsson South Africa and Telsaf Data.

The deal has been enveloped in controversy since it was announced in December.

The lawsuit alleges that Telkom violated the law, which deals with fair awarding by entities with a significant government shareholding, when awarding the two companies with the contract. And the dispute calls into question a close business relationship between Ericsson and Telkom senior management.

The contract for a microwave system was awarded to Telsaf Data and Ericsson in a 60 to 40 split. The product is a ‘back-haul’ system for cell-phone base stations and Telkom’s broadband wireless access network and would assist Telkom in providing broadband services.

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