Johannesburg - Vodacom Group [JSE:VOD] is facing a court
challenge from Wi-Fi specialist WirelessG.
WirelessG claims Vodacom reneged
on a shareholder agreement that grants its exclusivity over any Wi-Fi
infrastructure Vodacom operates or builds.
article that appeared on TechCentral, following a report on Thursday by consumer forum website MyBroadband, WirelessG CEO Carel van der Merwe said Vodacom has backtracked on the agreements between the parties.
This was after Vodacom realised that “data
offloading” onto Wi-Fi from its mobile broadband network was becoming a
WirelessG sold the 26% stake in the company
to Vodacom at a 49% discount in exchange for various commercial rights,
including exclusivity rights for Wi-Fi services and infrastructure.
According to Van der Merwe, Vodacom has
consulted with a number of WirelessG’s rivals in the past nine months, including
a Wi-Fi pilot project that excluded WirelessG.
“We saw that the spirit of the agreement
was not being adhered to.
“We approached Vodacom’s executive team and
asked them to honour the agreement. They asked that we relinquish exclusivity
before negotiations,” Van der Merwe said.“My
shareholders paid for those rights. There was a request for a discount to the
share price which amounted to about R30m.
"Five years ago, Wi-Fi was a poor cousin of
connectivity technologies, but now it’s important and there’s money to be
When Vodacom bought the stake in WirelessG,
the company said time and resources would limit the focus on technologies
“Vodacom wanted to focus on 3G because the
company felt it could make money there. Now that Wi-Fi is becoming important,
they want to ignore our agreement and walk all over us,” Van der Merwe said.
WirelessG has spent the past eight months
trying to negotiate with Vodacom.
escalated the matter to former Vodacom CEO Pieter Uys and to current CEO
“We were promised there would be
commitments about how Vodacom was going to execute the agreement. That deadline
hasn’t been met.”
Van der Merwe said he hopes the matter can
be resolved, but that Vodacom has given no indication it intends doing so.
“We want an irrevocable commitment about
implementation plans and timelines.”
Van der Merwe said WirelessG’s court papers
contain a document from Vodacom parent Vodafone indicating it wants to
extend its Wi-Fi offerings to the SA operator.
These offerings include its international
Vodacom spokesperson Richard Boorman confirms
it received an urgent court application from WirelessG last month but declined to
comment, as doing so “may prejudice the case”.
“We’re in the process of compiling a
response, which is due on 11 February. The matter is then set down for hearing
on 11 March,” Boorman said.
Vodacom believes it has a strong defence,
according to Boorman, but will likely try to reach an agreement out of court.