By Howard Sackstein
This week the South African ambassador to Israel was summoned by his hosts for a severe reprimand. Our government’s increasingly aggressive stance on Israel has caused relations between Jerusalem and Pretoria to implode.
One by one we have watched our despotic friends in the Middle East tumble from power and we watch silently as tens of thousands of Syrians die at the hands of Bashar al-Assad and that country spirals towards civil war.
At the end of August SA will attend a Non-Aligned Movement summit in Tehran, seat of one of the most oppressive theocracies of the modern era. Oil and political donations triumph over policy!
Despite our manifest indifference to human suffering, Israel features prominently in our foreign policy.
When Israel stopped a Turkish flotilla from illegally breaking the blockade on Gaza, South Africa, Nicaragua and Ecuador were the only countries, other than Turkey, to withdraw their ambassadors from Tel Aviv.
In March South Africa granted entry to renowned Hamas terrorist Abdul Aziz Umar to visit. Umar was given seven life sentences for taking part in the Café Hillel suicide bombing attack in Jerusalem, which killed seven people. Hamas denies Israel’s right to exist and calls for the expulsion of Jews from the Middle East. Ironically, Umar was dispatched to South Africa to promote Israel Apartheid Week.
On August 22, cabinet approved a plan promoted by pro-Palestinian advocates “to require traders in South Africa not to incorrectly label products that originate from the Occupied Palestinian Territory as products of Israel”. Minister of Trade and Industry Rob Davies denied the move was politically motivated. But he was soon contradicted by the deputy minister of international relations, Marius Fransman, who said “economic diplomacy could be one of the most effective weapons of change in the Palestinian situation. I am glad to inform you that our government released a government notice, as a strategy to apply economic pressure on Israel”.
So sympathetic has South Africa become to the anti-Israel cause, that terrorists last month plotted a foiled attack on Israeli targets in South Africa.
When a group of South African Jewish organisations and business leaders attempted to address the poor service-delivery record of our government by training South Africans in Israel, Deputy Minister of International Relations Ebrahim Ebrahim applied pressure to scupper the trips.
Over the past 60 years Israel has been training people throughout the continent. Under the leadership of the Israeli trade union movement black South African civic leaders, trade unionists and NGOs have been trained in Israel since the 1970s. Yehuda Paz was banned by the apartheid government from entering South Africa. Today a post-apartheid government attempts to ban South Africans from travelling to Israel to meet Paz.
Last week Ebrahim informed South Africans that Pretoria discourages all South Africans from visiting Israel. He said “because of the treatment and policies of Israel towards the Palestinian people, we strongly discourage South Africans from going there”.
Probably the most scathing criticism of the deputy minister came from the chief rabbi of South Africa, Dr Warren Goldstein, who described the deputy minister as unfit to hold public office and demanded he resign. Goldstein said: “Your actions hark back to apartheid-style control of information and censorship. For the sake of peace and justice, we need more information, not less; we need more dialogue, not less; we need more connections with other societies, not less.”
Officials in Ebrahim’s own department told the City Press that Ebrahim was old and sometimes did not understand policy.
Israel has little to gain from its contributions to South Africa. In the mind of Israel, South Africa is underdeveloped, battling with corruption, spiralling unemployment, chronic under-education and crippling service delivery.
South Africans must worry that Israel may take action to restrict its technology from being used in South Africa. Many farmers in rural South Africa have moved from subsistence farming to commercial farming based entirely on Israeli know-how and technology.
South Africa’s bona fides have been further dented by the MTN-Turkcell court case in the US. Turkcell alleges that South Africa protected Iran at the International Atomic Energy Agency in return for awarding a cellular licence to MTN. Assisting Iran to obtain nuclear weapons, not only destabilises the entire Middle East, but puts South Africa on a collision path.
South Africa has abandoned its desire to play any meaningful role in Middle East peace. Its failure to take any moral stand on international conflicts other than Israel/Palestine has undermined its own credibility. Its pronouncements are mere platitudes to gain domestic Muslim votes in the Western Cape and while service-delivery protests spread across the country fewer and fewer South African government officials will receive the training in Israel they desperately need.
Howard Sackstein has a degree in law and international relations, a post-graduate law degree and a masters in political advocacy and international conflict resolution. He was one of the founders of the Jewish anti-apartheid movement in South Africa and was executive director of South Africa’s Independent Electoral Commission. He led the only ANC delegation to ever visit Israel and took Nelson Mandela to Brussels on behalf of the World Jewish Congress.
Source: Mail & Guardian
Showing posts with label MTN. Show all posts
Showing posts with label MTN. Show all posts
Friday, August 31, 2012
Thursday, April 5, 2012
Iran 'puts the screws' on MTN
MTN is facing a storm over claims that it helped the Iranian government to spy on local subscribers and assisted the regime in its brutal crackdown on protesters in 2009 and 2010. In court papers lodged in the United States last week, rival mobile operator Turkcell alleged that MTN told its Iranian military-linked partners it would allow the defence ministry to eavesdrop on subscribers. Sources close to MTN's Iranian business have also described an Orwellian environment in the company's Tehran headquarters, where it allegedly gave military intelligence officials "open" access to subscribers’ details. The sources claimed:
Iran's mobile operators were harshly criticised for their alleged role in quelling protests that followed Iranian President Mahmoud Ahmadinejad's disputed victory in the 2009 elections. Activists who claimed to have been tortured after being arrested said that intelligence officials had their cellphone data.
'Human rights violations'
This week, the Democratic Alliance asked the South African Human Rights Commission to investigate whether MTN "may be directly or indirectly responsible for human rights violations in Iran". DA MP David Maynier said there was no evidence that MTN Irancell was involved directly or indirectly, but he cited media reports that the company bought equipment to monitor calls, filter and block SMSes, and establish the location of users. MTN flatly denied the claims this week, saying: "On human rights, the group takes direction from and adheres to the policies of both the South African government and the United Nations. South Africa has human rights enshrined as fundamental principles within its Constitution.
"Given South Africa's own recent history and our struggle against apartheid, the centrality of civil rights is at the core of our culture as a company and as individuals."
The company said the equipment it used in Iran was not intended to monitor dissidents "nor is there any evidence that the Iranian government has used the data collected to identify and locate citizens or dissidents". MTN is a 49% shareholder in Irancell. Fifty-one percent is held by an Iranian state-linked consortium, which is dominated by a subsidiary owned by the defence ministry known as Sairan, or Iran Electronics Industries. Sairan is subject to US and European Union sanctions that target proliferators of "weapons of mass destruction". It also holds a share in consortium Arya Hamrah, which owns and runs MTN Irancell's data centre that houses the company’s servers and hardware.
Military intelligence
The sources familiar with MTN's Iranian operations said that, because of these ownership structures, Irancell readily gave information about subscribers to intelligence officials. One of the sources said: "MTN's data centre in Iran is effectively run by the military and military intelligence. None of the intelligence organisations needs to go through normal procedures to access subscriber data and track individuals." Describing the climate at MTN's headquarters, a senior official said it was dominated by the presence of Iran's military intelligence officials and the "morality police".
"There was a tea lady who just stood at the printer all day. Her job was to watch us."
The woman, understood to be a member of the "morality police", would scold female staff whose clothing was considered too revealing and signalled her displeasure over "inappropriate" behaviour. Communicating by email, the source said: "The people on the second floor are from military intelligence and the Basij and some clerics. They oversee the intelligence and moral activities of the employees of Irancell. All emails, telephone conversations and SMSes of employees are monitored on an ongoing basis. This is then exposed to MTN against the threat that they will kick out MTN when they need concessions from it."
The staffer described how men from the second floor would accompany Dezfouli to collect data on individuals and political dissidents: "On several occasions someone from the second floor and [Dezfouli] would come to the managed services group and say 'give us all the details for this number', and they would have to." The staffer said subscription and location data and call and SMS histories were handed over. The company's data warehouse is outsourced to a South African company, PBT. According to the source: "PBT simply provides a data warehousing function. In other words, they extract data and provide data-mining functions for product development, market segmentation, etcetera. MTN owns the data, so they don't really have a choice."
Tracking activities
PBT spokesman Nitesh Vallabh said: "We only transform the data into aggregated information as requested by [MTN] for management information to manage the business." MTN used the information to help it profile and market to its customer base; it was not supposed to be used to identify and track the activities of individuals, the source said. But this did happen.
"In 2009 and 2010, it would happen four to five times in a month. It spiked whenever there were rallies or government protests. But it didn't happen every month."
In one case, the staffer said, he recognised a number as belonging to a friend, an active member of Iran's opposition Green Party.
"We were friends and talked maybe every two weeks. Then one day a request came for his number and [they] gave them his data. I tried to call him that night and I could not reach him. Four months later I still couldn’t reach him on the number or Skype."
In another case, the staffer said, he was talking to an acquaintance in South Africa in their home language when a voice broke in to say: "English, English, English!" He was using an Irancell SIM at the time, "but whether this was a national or an MTN function, I don’t know."
Shortly before going to print, MTN Human Resources Head Paul Norman submitted the following written response to questions over allegations that it assisted the Iranian regime in monitoring the communications and movements of political activists:
"MTN's role in Iran is mostly as a technical partner. It is a non-controlling shareholder. Fewer than 30 MTN expats (not all South African) are employed in Irancell, out of around 2000. Whatever equipment MTN has acquired for Irancell was for normal business reasons. This is the same software we utilize at other MTN operations. To suggest that we acquired such equipment with the active purpose of enhancing the Iranian government’s capacity to monitor its citizens outside the law is simply outrageous. We have never cut off Skype and we do not own the international gateway. Some of the equipment listed was purchased to develop our 'homezone' offerings, which allow reduced rates within specific regional areas and thus expands the offering to more people.
"The data warehousing software was acquired to predict, churn and to see when airtime is running out and suggest new products and services to customers. This is standard software that is used by telcos, financial services and other companies around the world to improve the service that customers receive. It has nothing to do with interception, nor is there any evidence that the Iranian government has used the data collected to identify and locate citizens or dissidents.
"It is important to note that when MTN entered Iran, there were only around four million subscribers in total. Today there are almost 35 million subscribers, of whom more than 60% are below 25 years old. These are young people who use the network to communicate with each other, Skype, access Google and tweet each other. MTN works hard, with international legal advisors, to ensure that it is sanctions compliant. MTN's views on human rights are clear. We are a South African company, founded in the year of our first democratic elections under a new constitution.
Civic and human rights are vital to the company, and as the individuals that work at MTN. MTN has a social and ethics committee of the board to look as such issues. One of our core values is respect human rights and privacy rights of people in all the markets in which we operate. We oppose abuse of such rights by any party, including governments, and we communicate our procedures extensively internally. We expect all our business partners to abide by our code of ethics
"Mobile telecoms has been a force for political and economic liberation in the emerging world over the last 10 years. MTN is proud of the part it played in contributing to this. But we accept the ethical complexities around telecoms in this new environment, and the potential for their manipulation for unethical means.
These are new areas of ethics and political debate. These issues also impact other telecom operators and Internet providers across emerging markets. MTN is keen to work with international bodies to construct clearer international standards."
*Got a tip-off for us about this story? Email amabhungane@mg.co.za
Source: Mail & Guardian
- Because MTN Irancell and its data centre were part-owned by the Iranian military, subscriber data was shared "on a collegial basis" with the intelligence sector;
- A shadowy "second floor" in MTN's building was populated by military intelligence officials, the volunteer militia known as the Basij ("morality police") and clerics;
- During the 2009 and 2010 Green movement protests, men from the second floor, accompanied by Irancell chief executive Alireza Dezfouli, allegedly approached data warehouse staff regularly to demand detailed records for individuals;
- In one case, they demanded the number of a known Green Party activist, who could not be reached after his information had been given to military intelligence; and
- Third parties listened in to staff calls over Irancell SIMs and would intervene and demand that the staff speak in English and not in other South African languages.
Iran's mobile operators were harshly criticised for their alleged role in quelling protests that followed Iranian President Mahmoud Ahmadinejad's disputed victory in the 2009 elections. Activists who claimed to have been tortured after being arrested said that intelligence officials had their cellphone data.
'Human rights violations'
This week, the Democratic Alliance asked the South African Human Rights Commission to investigate whether MTN "may be directly or indirectly responsible for human rights violations in Iran". DA MP David Maynier said there was no evidence that MTN Irancell was involved directly or indirectly, but he cited media reports that the company bought equipment to monitor calls, filter and block SMSes, and establish the location of users. MTN flatly denied the claims this week, saying: "On human rights, the group takes direction from and adheres to the policies of both the South African government and the United Nations. South Africa has human rights enshrined as fundamental principles within its Constitution.
"Given South Africa's own recent history and our struggle against apartheid, the centrality of civil rights is at the core of our culture as a company and as individuals."
The company said the equipment it used in Iran was not intended to monitor dissidents "nor is there any evidence that the Iranian government has used the data collected to identify and locate citizens or dissidents". MTN is a 49% shareholder in Irancell. Fifty-one percent is held by an Iranian state-linked consortium, which is dominated by a subsidiary owned by the defence ministry known as Sairan, or Iran Electronics Industries. Sairan is subject to US and European Union sanctions that target proliferators of "weapons of mass destruction". It also holds a share in consortium Arya Hamrah, which owns and runs MTN Irancell's data centre that houses the company’s servers and hardware.
Military intelligence
The sources familiar with MTN's Iranian operations said that, because of these ownership structures, Irancell readily gave information about subscribers to intelligence officials. One of the sources said: "MTN's data centre in Iran is effectively run by the military and military intelligence. None of the intelligence organisations needs to go through normal procedures to access subscriber data and track individuals." Describing the climate at MTN's headquarters, a senior official said it was dominated by the presence of Iran's military intelligence officials and the "morality police".
"There was a tea lady who just stood at the printer all day. Her job was to watch us."
The woman, understood to be a member of the "morality police", would scold female staff whose clothing was considered too revealing and signalled her displeasure over "inappropriate" behaviour. Communicating by email, the source said: "The people on the second floor are from military intelligence and the Basij and some clerics. They oversee the intelligence and moral activities of the employees of Irancell. All emails, telephone conversations and SMSes of employees are monitored on an ongoing basis. This is then exposed to MTN against the threat that they will kick out MTN when they need concessions from it."
The staffer described how men from the second floor would accompany Dezfouli to collect data on individuals and political dissidents: "On several occasions someone from the second floor and [Dezfouli] would come to the managed services group and say 'give us all the details for this number', and they would have to." The staffer said subscription and location data and call and SMS histories were handed over. The company's data warehouse is outsourced to a South African company, PBT. According to the source: "PBT simply provides a data warehousing function. In other words, they extract data and provide data-mining functions for product development, market segmentation, etcetera. MTN owns the data, so they don't really have a choice."
Tracking activities
PBT spokesman Nitesh Vallabh said: "We only transform the data into aggregated information as requested by [MTN] for management information to manage the business." MTN used the information to help it profile and market to its customer base; it was not supposed to be used to identify and track the activities of individuals, the source said. But this did happen.
"In 2009 and 2010, it would happen four to five times in a month. It spiked whenever there were rallies or government protests. But it didn't happen every month."
In one case, the staffer said, he recognised a number as belonging to a friend, an active member of Iran's opposition Green Party.
"We were friends and talked maybe every two weeks. Then one day a request came for his number and [they] gave them his data. I tried to call him that night and I could not reach him. Four months later I still couldn’t reach him on the number or Skype."
In another case, the staffer said, he was talking to an acquaintance in South Africa in their home language when a voice broke in to say: "English, English, English!" He was using an Irancell SIM at the time, "but whether this was a national or an MTN function, I don’t know."
Shortly before going to print, MTN Human Resources Head Paul Norman submitted the following written response to questions over allegations that it assisted the Iranian regime in monitoring the communications and movements of political activists:
"MTN's role in Iran is mostly as a technical partner. It is a non-controlling shareholder. Fewer than 30 MTN expats (not all South African) are employed in Irancell, out of around 2000. Whatever equipment MTN has acquired for Irancell was for normal business reasons. This is the same software we utilize at other MTN operations. To suggest that we acquired such equipment with the active purpose of enhancing the Iranian government’s capacity to monitor its citizens outside the law is simply outrageous. We have never cut off Skype and we do not own the international gateway. Some of the equipment listed was purchased to develop our 'homezone' offerings, which allow reduced rates within specific regional areas and thus expands the offering to more people.
"The data warehousing software was acquired to predict, churn and to see when airtime is running out and suggest new products and services to customers. This is standard software that is used by telcos, financial services and other companies around the world to improve the service that customers receive. It has nothing to do with interception, nor is there any evidence that the Iranian government has used the data collected to identify and locate citizens or dissidents.
"It is important to note that when MTN entered Iran, there were only around four million subscribers in total. Today there are almost 35 million subscribers, of whom more than 60% are below 25 years old. These are young people who use the network to communicate with each other, Skype, access Google and tweet each other. MTN works hard, with international legal advisors, to ensure that it is sanctions compliant. MTN's views on human rights are clear. We are a South African company, founded in the year of our first democratic elections under a new constitution.
Civic and human rights are vital to the company, and as the individuals that work at MTN. MTN has a social and ethics committee of the board to look as such issues. One of our core values is respect human rights and privacy rights of people in all the markets in which we operate. We oppose abuse of such rights by any party, including governments, and we communicate our procedures extensively internally. We expect all our business partners to abide by our code of ethics
"Mobile telecoms has been a force for political and economic liberation in the emerging world over the last 10 years. MTN is proud of the part it played in contributing to this. But we accept the ethical complexities around telecoms in this new environment, and the potential for their manipulation for unethical means.
These are new areas of ethics and political debate. These issues also impact other telecom operators and Internet providers across emerging markets. MTN is keen to work with international bodies to construct clearer international standards."
*Got a tip-off for us about this story? Email amabhungane@mg.co.za
Source: Mail & Guardian
Friday, March 30, 2012
MTN's cash, weapons and ties in Iran
Cellphone giant MTN was so desperate to win a mobile operating licence in the "virgin" territory of Iran that it allegedly put together a package of bribes, trading opportunities in sophisticated weaponry, capital investment and diplomatic influence that the Islamic Republic could not resist. That is the claim of rival firm Turkcell, which was pushed out of the deal when MTN arrived on the scene. It backs up the allegation with a raft of what appears to be internal MTN documents, leaked from the heart of the company's Iran operation.
The allegations are set out in a $4-billion (R32-billion) lawsuit launched in the US District Court of Columbia in Washington DC this week. The scheme, allegedly known in MTN as "Project Snooker", was allegedly driven from the top by then-chief executive Phuthuma Nhleko, with the assistance of Irene Charnley (then commercial director), and Sifiso Dabengwa (then chief operating officer). It included alleged bribes to South Africa's ambassador to Iran, Yusuf "Jo-Jo" Saloojee, and Iran's deputy foreign minister, Javid Ghorbanoghli; the involvement of former defence minister Mosiuoa Lekota in the procurement of highly sensitive weapons systems from parastatal Denel; and access for Iranian officials to South Africa's top nuclear envoy, Abdul Minty. The memos attached to the court papers apparently set out how Ghorbanoghli, dubbed "Long John", was allegedly paid $400 000 to politically undermine Turkcell's position while Saloojee, codenamed "Short John'', was allegedly paid $200 000 to help MTN deliver pro-Iran votes from South Africa at the International Atomic Energy Agency (IAEA) amid controversy over Iran's nuclear plans.
The Irancell cellphone network was projected to be worth $31.6-billion in revenues over 15 years for a licence fee of $380-million. The licence holder and the Iranian state-owned telecommunications company were to enjoy exclusive use of the market for two years before a third competing licence would be awarded. Turkcell won the bid on February 18 2004 and MTN came second. But Turkcell claims that MTN, through "unprecedented corrupt acts", blocked it from entering the agreements, clearing the regulatory environment and completing post-award obligations. To secure the 49% stake in Irancell, MTN effectively also allegedly carried all the costs for its 51% partner through "sham loans", Turkcell says.
It is alleged in the papers that MTN paid the €300-million licence fee, capitalisation costs and share transfer tax of Iran's state-owned defence company, Sairan (also known as Iran Electronic Industries or IEI) and Bonyad (one of the five Iranian quasi-independent charitable foundations that is integral to Iran's defence establishment) in exchange for their assistance within the ministry of defence and the "Supreme Leader".
What follows is a summary of Turkcell's claims in its court application and the supporting documentation that allegedly emanates from within MTN. It has not yet been tested in court, nor has MTN commented on the authenticity of the documents. A few weeks after Turkcell was made the preferred bidder, Charnley met with Ghorbanoghli (Long John) in Tehran where the minister told her that MTN's only chance to oust Turkcell was to win political influence in Iran and use South Africa's influence to favour the Iranian government at the UN Security Council. And so began "Project Snooker" -- the plan on how best to use Iranian and South African government officials to allegedly gain political influence. MTN reached out to a former deputy minister for the Iranian ministry of information and communications technology and to Mohammed Mokhber, the deputy president of a major charitable foundation known as Bonyad Mostazafan, controlled by the supreme leader of Iran.
The Bonyad foundation is controlled by the Iran Revolutionary Guard Corps, the military complex formed by Iran's supreme leader, Ayatollah Ali Khamenei, and is believed to control about one-third of the Iranian economy. It is known for engaging in Iran's shadow foreign policy. MTN was then introduced to Ebrahim Mahmoudzadeh, a former Iranian deputy minister of defence and then-president of Iran Electronic Industries, who reported directly to the Iranian minister of defence. As one of Turkcell's local minority partners in the Irancell consortium, Mokhber and Mahmoudzadeh told MTN executives they would be willing to work with the South African company and dump Turkcell if MTN could obtain certain defence equipment, support its nuclear programme and pay for the licence and other benefits. For example, MTN was urged to facilitate the purchase of certain military equipment from South Africa for Iran's state-owned defence company, Sairan, which was previously blocked by South Africa's national conventional arms control committee. For more than a year, MTN executives regularly visited Mahmoudzadeh and the ministry of foreign affairs to reinforce its political influence.
In about April 2004, the Iranians tested MTN's ability to deliver on defence products and nuclear votes. Sairan requested that MTN arrange a meeting with Denel, South Africa's largest manufacturer of defence equipment, as well as then-defence minister Mosiuoa Lekota. MTN was told Iran was building its defence force and it wanted to purchase military radios, encryption technologies and pilot display computer chips manufactured in the Western Cape, which South Africa refused to sell them previously. MTN made a commitment that it could procure this equipment as well as facilitate installation of eavesdropping technologies on MTN devices were they to be awarded the 49% stake in Irancell.
The MTN board of directors, including Cyril Ramaphosa, Nhleko, Dabengwa and Charnley, received regular reports on the status of Turkcell's licence and MTN's strategies. Enter Saloojee, "aka Small John", who was appointed South Africa's ambassador to Iran on May 23 2004. Before he left for Tehran, MTN briefed him about the licence situation and about its desire to win the licence from Turkcell. "Small John" started working closely with "Long John" and convinced the Iranian government that MTN had enough political clout to help Iran on its nuclear and defence equipment needs. Charnley was key to that mix because of her political connections in South Africa, particularly with Lekota -- she worked closely with him in the United Democratic Front during the 1980s. Ramaphosa also enjoyed a close relationship with Lekota because of their ties in the ANC.
It is well known in political circles that Charnley and Nhleko were closely aligned with former president Thabo Mbeki. Charnley is friends with Mbeki's wife, Zanele, who assisted the former MTN executive with funds to help start Smile Communications, a telecoms company. "Small John" was also allegedly close to Mbeki, with whom he had shared a house at some point during the struggle. In about June 2004, Saloojee invited Charnley and Nhleko to his house for dinner and that's where the discussion of the bribes for both "Small John" and "Long John" took place. Saloojee explained that he was hoping to purchase a house in South Africa for $200 000. On April 26 2007, MTN made a direct payment into a trust account for Saloojee, which was received by his property attorneys, Gildenhuys Lessing Malatji Inc. The property transaction was closed on September 26 2007.
MTN had also made a promise to Ghorbanoghli to reimburse him for his assistance and Saloojee had helped the Iranian with personal favours, such as arranging for his children to be educated in South Africa. It was at a dinner in May 2005 that Charnley offered Ghorbanoghli a $400 000 bribe through a "sham" consultancy agency agreement to reward his efforts to politically undermine and destroy Turkcell's position as the licence holder and to deliver the licence to MTN instead. The "sham" consultancy payment was authorised by Nhleko on behalf of MTN in a memo dated December 11 2006.
Charnley was sent a confidential memo in which Ghorbanoghli says he has arranged for a friend in Dubai to receive the funds on his behalf through a company called Aristo Oil International Services. In an invoice from Aristo it described the scope of the responsibilities as "introduce MTN-Iran to key role-players, arrange meetings and generally provide support and assistance during the negotiations and conclusion of the necessary agreements that will provide for MTN's entry into the Iranian mobile market". Ghorbanoghli delivered on that. On September 17 2005 MTN's executive team flew to Iran and finalised agreements with the IEDC and payment structures. A day later MTN issued a notice to its board members regarding "Project Snooker" and its decision to officially take up the GSM licence in Iran.
On September 21 2005, two months before being awarded the licence, Nhleko delivered a confidential memorandum to Dabengwa, Charnley and MTN's former chief financial officer, Robert Nisbet, which was copied to the Chris Kilowan and Paul Norman setting out in detail the ground rules for "Project Snooker" and how MTN would deliver on the defence and nuclear support promises.
Weapons: The promised Denel collaboration, which clearly came off
In August 2004, MTN accompanied Lekota on a trip to Iran, which the cellphone company organised and paid for, where they struck an "arms- for-licence" deal with the Iranian ministry of defence to deliver "The Fish". Nhleko and Charnley were present at the meeting where they signed a confidential memorandum of understanding, promising that South Africa would deliver "heaven, earth, and fish", meaning the elicit arms and technology in exchange for the licence.
"The Fish" was a code for the name for a combination of military co-operation and big-ticket defence equipment, including Rooivalk helicopters, frequency-hopping encrypted military radios, sniper rifles, G5 howitzers, cannons, armoured landmine-proof personnel carriers, radar technology, pilot "heads-up" display technology and other defence articles that included US systems and components. Iran didn't have access to this equipment legitimately because of US and international sanctions against it at the time. To reassure the Iranian authorities, MTN paid for Iran's nuclear negotiator to meet with then-president Mbeki at his Cape Town residence, a meeting which was apparently facilitated by Charnley, Ramaphosa and Saloojee through their political connections.
On November 16 2004, Charnley sent a letter via fax on behalf of MTN, copied to Saloojee, facilitating a meeting between Denel and the Iran Helicopter Support and Renewal Co. The letter indicated that Charnley had met with then-Denel chief executive Victor Moche to provide helicopter technology from Denel to produce helicopters with US Apache technology in Iran. Denel's former head for North Africa and the Middle East, Donald Romfolo, confirmed they had been in talks with Iran's defence ministry and state arms company, Sairan, in 2004. But he said the national conventional arms control committee barred the company from trading in Iran "because of the US sanctions". He denied any knowledge of Charnley and said he knew of no talks with MTN or pressure applied by the company.
Lekota, now president of Cope, flatly denied on Thursday that MTN had paid for any visit by him to Iran. "This is absolutely fallacious. Defence was never bankrupt when I was there." However, he confirmed one or more visits "in my official capacity" to Iran, and he confirmed that "in one of those visits it coincided with the MTN people also travelling there -- they did form part of the South African delegation going there". "I had meetings with the relevant minister and I think even the head of state … but at no stage did I have any meetings with the cellphone company MTN, I was never in any meeting. I had no obligation or, in fact, no power to negotiate anything on behalf of MTN. I think MTN negotiated their business with their counterparts quite independent of their mission. I could not have made any promises to the Iranian government on defence co-operation without going through Cabinet."
Later, confronted with a specific allegation that he had met his Iranian counterpart in the presence of MTN officials, he conceded that "when official business had been done … we might have been entertained, and that the businesspeople that may have been part of this visit may have been part of that". "I deny that there was any negotiations around MTN's business interests by the ministry of defence led by myself." Lekota denied that he would have promised any weapons outside of the arms control committee's approvals that would have to follow. "I never made any commitments of the nature you are suggesting." In the end, and once Iran had handed the licence to MTN, it seems whatever promises about defence materiel may have been made, came to naught.
In March 2007, a year and half after MTN was awarded the licence, MTN began facing even greater pressure from its Iranian partners to deliver on some of its defence and nuclear-related promises. MTN's representative in Iran, Chris Kilowan, sent a memo to Nhleko from the Iranians calling on the company to deliver on its defence promises. "[MTN's chief executive Nhleko] should attempt as a matter of urgency to contact the president of South Africa and impress upon him that the failure to resolve the defence matters to the satisfaction of Iran will have severe negative repercussions for MTN," read the memo attached as an exhibit. The "highly confidential" memo recounts Saloojee's description of visits to South Africa by top Iranian officials on behalf of supreme leader Ayatollah Ali Khamenei and President Mahmoud Ahmadinejad.
Khamenei dispatched Ali Larijani, then the secretary of Iran's Supreme National Security Council, to remind Mbeki "that certain defence-related promises were made by the South African minister of defence in 2004 in exchange for which MTN was allowed to replace Turkcell in the Irancell consortium". The same memo reports that Manouchehr Mottaki, then Iran's foreign minister, was sent by Ahmadinejad to "get a direct answer" from Mbeki about South Africa's alleged promises to sell arms to Iran. Kilowan wrote in the memo: "Mottaki reiterated their understanding that MTN was allowed to replace Turkcell in exchange for defense co-operation."
On the UN Security Council vote, the memo said: "It is now a matter of public record what happened to the vote on Saturday … that South Africa also voted in favour of the sanctions." The memo also relates Saloojee's concerns. "The Iranians did not expect the voting to go otherwise, although they were hopeful that South Africa would at least abstain. As it is, South Africa is now seen as having made a U-turn on the matter and we will have to closely monitor the reaction of the Iranians to the fact." MTN also found itself being threatened in late 2007 by "Long John" for not delivering on its promises. Mbeki's spokesperson, Mukoni Ratshitanga, told the M&G: "Former president Thabo Mbeki does not believe that he should oblige attempts to drag his name into this matter and will therefore not comment."
The Votes: International Atomic Energy Agency and the United Nations
Throughout 2004 and 2005, at the same time that MTN was lobbying hard to displace Turkcell, Iran came under intense pressure over its nuclear enrichment programme. The international community had repeatedly voted against the state before the International Atomic Energy Authority and the UN Security Council, calling on it to meet its obligations under the Nuclear Non-Proliferation Treaty. In fact, as Turkcell detailed, from 2004 to 2008, South Africa largely joined the votes against Iran except for a brief hiatus at the end of 2005 and the beginning of 2006, which coincided with the November 2005 license award. "MTN learned that the Iranians understood South Africa to play a critical role in being able to lead the 'non-aligned' nations on nuclear votes in international bodies," Turkcell stated. And so, Turkcell claims, the cellphone giant orchestrated an "informal" meeting between Mbeki and Iran's nuclear chief, Hassan Rowhani, at a dinner at Mbeki's Cape Town residence. "MTN paid for adviser Rowhani to stay at a hotel in Cape Town, sponsored the large dinner party, and covered all travel logistics," Turkcell claims. "Consistent with MTN's promises, the president assured adviser Rowhani that the South African government would support Iran at the [International Atomic Energy Authority]." But Mbeki, through his spokesperson, refused to comment on this account.
That September, when the International Atomic Energy Authority board found Iran not to be complying with its non-proliferation treaty obligations, South Africa abstained. Come November 20, Turkcell detailed, MTN expected it was to be awarded the licence. Instead, the Iranians are said to have delivered the message that should South Africa vote against Iran at a crucial November 24 vote before the IAEA, it would "cause trouble".
The decision the IAEA has to make was on whether to refer Iran to the UN Security Council for breaching the NPT. This appears to have sent the company's mavericks into a bit of a spin. It is alleged they approached Saloojee, who approached South African ambassador to the IAEA Abdul Minty. Other frantic calls were made, and as it happened, South Africa abstained from the vote. Three days later the Iranians issued the GSM license to MTN.
The M&G was unable to reach Minty on Thursday, but when he was approached on the matter in February, he strenuously denied having been influenced: "At no point did [MTN] approach me to influence me in any direction." According to him, South Africa's policy on Iran at the IAEA had been "very consistent". After being awarded the 49% stake, MTN made good on its promises to its 51% shareholder, carrying all its costs. MTN agreed to pay the IEDC's $88-million capital share of MTN Irancell as well as their share of the $300-million licence fee.
The Iranian partners were clear that they were not willing to pay any "interest" on, or put up security for, a "loan". Charnley presented the proposed arrangement to MTN. Rob Nisbett, the chief financial officer, was apparently shocked at the proposal and refused to permit the deal on "improper and unsecured terms". He insisted that a formal loan agreement be negotiated and entered into with the parties. He also threatened to resign if this was not done.
On November 15 2005 MTN Group directed its subsidiary, MTN International (Mauritius) Ltd, to enter into sham "loan" agreements with the IEDC. Nisbett still voiced concern about this arrangement and informed the executive team that the "loans" put MTN at huge risk. Nhleko issued Nisbett with a formal written warning for opposing the financial terms and was instructed to authorise the transaction. Documents show MTN made the "loans" through a series of complex "round trip" agreements by shifting the funds around between the IEDC, MTN-Irancell, and MTN Group, which it then recorded on its books as loans. By the time the loans were due, MTN-Irancell was highly profitable -- $118-million profit in 2007, $234-million in 2008, $516-million in 2009, $583-million in 2010 and at least $503-million projected for 2011.
Charnley did not respond to numerous messages left on her cellphone and with an assistant in her office. An automatic message at Saloojee's office -- the South African embassy in Oman where he is ambassador -- said staff did not work on Thursdays, and emails were not answered. Spokespeople for Nhleko and Ramaphosa said they would pass on the M&G's respective messages, but neither responded in time for print deadline.
Department of International Affairs and Cooperation spokesperson Clayson Monyela could not be reached, but last month he denied that any company had influence over South Africa's foreign policy. Calls to Iran's embassy in South Africa were placed on hold, after which no calls were answered.
MTN and its legal advisers were locked in all-day meetings yesterday, filing its JSE news service (Sens) announcement only at 5.30pm in response to the explosive claims made by Turkcell in a lawsuit filed in the Washington Federal Court at 2am South African time.
Africa's largest cellphone operator said the claim had still not been served, but that it would oppose it. The company reiterated that there was "no legal merit" to Turkcell's claim and no basis for such a claim to be brought before a United States court. It also noted the South African government's denial of the allegations that MTN exercised influence over it. In advance of Turkcell filing its claim, MTN announced the formation of an independent committee, under the chairmanship of internationally renowned jurist Lord Hoffmann, to investigate Turkcell's allegations. The Hoffmann committee has already begun its investigations and will report its findings to the MTN board, with any recommendations on actions to be taken as a result of its findings, including their publication. "The Hoffmann committee has invited Turkcell to participate in its investigation, but Turkcell has to date not done so," MTN said in the statement. "The invitation remains open to Turkcell to participate in the Hoffmann committee's investigation."
Turkcell has been threatening to take MTN to the US courts for corruption since February 2, but held out for a settlement from MTN first before it filed. MTN has been calling its bluff by refusing to settle out of court, claiming extortion. Turkcell has argued that MTN has many business interests in the US and that the cellphone company has violated the Alien Tort Statute, a 1789 law that gives US courts jurisdiction in some instances to consider claims by foreigners for illegal conduct that occurred in another country. The law is usually cited in human rights and torture cases.
Meanwhile, Turkcell was yesterday dealing with its own set of issues relating to infighting among its board and shareholders. Reuters reported that the board met to discuss its structure and independent board members. Having founded Turkcell in 1994, Mehmet Emin Karamehmet is locked in a boardroom struggle with the other main shareholders in Turkcell: Altimo and Nordic telecommunications group TeliaSonera.
Turkcell's board has seven members. The three main shareholders -- Cukurova, Altimo and TeliaSonera -- each has two seats. Chairperson Colin Williams is the designated independent board member. Altimo and TeliaSonera want him replaced because they say he sides with Cukurova, Reuters reports. TeliaSonera has a 37% stake in Turkcell, whereas Altimo has a 13.2% stake it bought from Karamehmet in 2005. However, Cukurova's 13.8% stake carries controlling rights because of Turkcell's structure.
Source: Mail & Guardian
The allegations are set out in a $4-billion (R32-billion) lawsuit launched in the US District Court of Columbia in Washington DC this week. The scheme, allegedly known in MTN as "Project Snooker", was allegedly driven from the top by then-chief executive Phuthuma Nhleko, with the assistance of Irene Charnley (then commercial director), and Sifiso Dabengwa (then chief operating officer). It included alleged bribes to South Africa's ambassador to Iran, Yusuf "Jo-Jo" Saloojee, and Iran's deputy foreign minister, Javid Ghorbanoghli; the involvement of former defence minister Mosiuoa Lekota in the procurement of highly sensitive weapons systems from parastatal Denel; and access for Iranian officials to South Africa's top nuclear envoy, Abdul Minty. The memos attached to the court papers apparently set out how Ghorbanoghli, dubbed "Long John", was allegedly paid $400 000 to politically undermine Turkcell's position while Saloojee, codenamed "Short John'', was allegedly paid $200 000 to help MTN deliver pro-Iran votes from South Africa at the International Atomic Energy Agency (IAEA) amid controversy over Iran's nuclear plans.
The Irancell cellphone network was projected to be worth $31.6-billion in revenues over 15 years for a licence fee of $380-million. The licence holder and the Iranian state-owned telecommunications company were to enjoy exclusive use of the market for two years before a third competing licence would be awarded. Turkcell won the bid on February 18 2004 and MTN came second. But Turkcell claims that MTN, through "unprecedented corrupt acts", blocked it from entering the agreements, clearing the regulatory environment and completing post-award obligations. To secure the 49% stake in Irancell, MTN effectively also allegedly carried all the costs for its 51% partner through "sham loans", Turkcell says.
It is alleged in the papers that MTN paid the €300-million licence fee, capitalisation costs and share transfer tax of Iran's state-owned defence company, Sairan (also known as Iran Electronic Industries or IEI) and Bonyad (one of the five Iranian quasi-independent charitable foundations that is integral to Iran's defence establishment) in exchange for their assistance within the ministry of defence and the "Supreme Leader".
What follows is a summary of Turkcell's claims in its court application and the supporting documentation that allegedly emanates from within MTN. It has not yet been tested in court, nor has MTN commented on the authenticity of the documents. A few weeks after Turkcell was made the preferred bidder, Charnley met with Ghorbanoghli (Long John) in Tehran where the minister told her that MTN's only chance to oust Turkcell was to win political influence in Iran and use South Africa's influence to favour the Iranian government at the UN Security Council. And so began "Project Snooker" -- the plan on how best to use Iranian and South African government officials to allegedly gain political influence. MTN reached out to a former deputy minister for the Iranian ministry of information and communications technology and to Mohammed Mokhber, the deputy president of a major charitable foundation known as Bonyad Mostazafan, controlled by the supreme leader of Iran.
The Bonyad foundation is controlled by the Iran Revolutionary Guard Corps, the military complex formed by Iran's supreme leader, Ayatollah Ali Khamenei, and is believed to control about one-third of the Iranian economy. It is known for engaging in Iran's shadow foreign policy. MTN was then introduced to Ebrahim Mahmoudzadeh, a former Iranian deputy minister of defence and then-president of Iran Electronic Industries, who reported directly to the Iranian minister of defence. As one of Turkcell's local minority partners in the Irancell consortium, Mokhber and Mahmoudzadeh told MTN executives they would be willing to work with the South African company and dump Turkcell if MTN could obtain certain defence equipment, support its nuclear programme and pay for the licence and other benefits. For example, MTN was urged to facilitate the purchase of certain military equipment from South Africa for Iran's state-owned defence company, Sairan, which was previously blocked by South Africa's national conventional arms control committee. For more than a year, MTN executives regularly visited Mahmoudzadeh and the ministry of foreign affairs to reinforce its political influence.
In about April 2004, the Iranians tested MTN's ability to deliver on defence products and nuclear votes. Sairan requested that MTN arrange a meeting with Denel, South Africa's largest manufacturer of defence equipment, as well as then-defence minister Mosiuoa Lekota. MTN was told Iran was building its defence force and it wanted to purchase military radios, encryption technologies and pilot display computer chips manufactured in the Western Cape, which South Africa refused to sell them previously. MTN made a commitment that it could procure this equipment as well as facilitate installation of eavesdropping technologies on MTN devices were they to be awarded the 49% stake in Irancell.
The MTN board of directors, including Cyril Ramaphosa, Nhleko, Dabengwa and Charnley, received regular reports on the status of Turkcell's licence and MTN's strategies. Enter Saloojee, "aka Small John", who was appointed South Africa's ambassador to Iran on May 23 2004. Before he left for Tehran, MTN briefed him about the licence situation and about its desire to win the licence from Turkcell. "Small John" started working closely with "Long John" and convinced the Iranian government that MTN had enough political clout to help Iran on its nuclear and defence equipment needs. Charnley was key to that mix because of her political connections in South Africa, particularly with Lekota -- she worked closely with him in the United Democratic Front during the 1980s. Ramaphosa also enjoyed a close relationship with Lekota because of their ties in the ANC.
It is well known in political circles that Charnley and Nhleko were closely aligned with former president Thabo Mbeki. Charnley is friends with Mbeki's wife, Zanele, who assisted the former MTN executive with funds to help start Smile Communications, a telecoms company. "Small John" was also allegedly close to Mbeki, with whom he had shared a house at some point during the struggle. In about June 2004, Saloojee invited Charnley and Nhleko to his house for dinner and that's where the discussion of the bribes for both "Small John" and "Long John" took place. Saloojee explained that he was hoping to purchase a house in South Africa for $200 000. On April 26 2007, MTN made a direct payment into a trust account for Saloojee, which was received by his property attorneys, Gildenhuys Lessing Malatji Inc. The property transaction was closed on September 26 2007.
MTN had also made a promise to Ghorbanoghli to reimburse him for his assistance and Saloojee had helped the Iranian with personal favours, such as arranging for his children to be educated in South Africa. It was at a dinner in May 2005 that Charnley offered Ghorbanoghli a $400 000 bribe through a "sham" consultancy agency agreement to reward his efforts to politically undermine and destroy Turkcell's position as the licence holder and to deliver the licence to MTN instead. The "sham" consultancy payment was authorised by Nhleko on behalf of MTN in a memo dated December 11 2006.
Charnley was sent a confidential memo in which Ghorbanoghli says he has arranged for a friend in Dubai to receive the funds on his behalf through a company called Aristo Oil International Services. In an invoice from Aristo it described the scope of the responsibilities as "introduce MTN-Iran to key role-players, arrange meetings and generally provide support and assistance during the negotiations and conclusion of the necessary agreements that will provide for MTN's entry into the Iranian mobile market". Ghorbanoghli delivered on that. On September 17 2005 MTN's executive team flew to Iran and finalised agreements with the IEDC and payment structures. A day later MTN issued a notice to its board members regarding "Project Snooker" and its decision to officially take up the GSM licence in Iran.
On September 21 2005, two months before being awarded the licence, Nhleko delivered a confidential memorandum to Dabengwa, Charnley and MTN's former chief financial officer, Robert Nisbet, which was copied to the Chris Kilowan and Paul Norman setting out in detail the ground rules for "Project Snooker" and how MTN would deliver on the defence and nuclear support promises.
Weapons: The promised Denel collaboration, which clearly came off
In August 2004, MTN accompanied Lekota on a trip to Iran, which the cellphone company organised and paid for, where they struck an "arms- for-licence" deal with the Iranian ministry of defence to deliver "The Fish". Nhleko and Charnley were present at the meeting where they signed a confidential memorandum of understanding, promising that South Africa would deliver "heaven, earth, and fish", meaning the elicit arms and technology in exchange for the licence.
"The Fish" was a code for the name for a combination of military co-operation and big-ticket defence equipment, including Rooivalk helicopters, frequency-hopping encrypted military radios, sniper rifles, G5 howitzers, cannons, armoured landmine-proof personnel carriers, radar technology, pilot "heads-up" display technology and other defence articles that included US systems and components. Iran didn't have access to this equipment legitimately because of US and international sanctions against it at the time. To reassure the Iranian authorities, MTN paid for Iran's nuclear negotiator to meet with then-president Mbeki at his Cape Town residence, a meeting which was apparently facilitated by Charnley, Ramaphosa and Saloojee through their political connections.
On November 16 2004, Charnley sent a letter via fax on behalf of MTN, copied to Saloojee, facilitating a meeting between Denel and the Iran Helicopter Support and Renewal Co. The letter indicated that Charnley had met with then-Denel chief executive Victor Moche to provide helicopter technology from Denel to produce helicopters with US Apache technology in Iran. Denel's former head for North Africa and the Middle East, Donald Romfolo, confirmed they had been in talks with Iran's defence ministry and state arms company, Sairan, in 2004. But he said the national conventional arms control committee barred the company from trading in Iran "because of the US sanctions". He denied any knowledge of Charnley and said he knew of no talks with MTN or pressure applied by the company.
Lekota, now president of Cope, flatly denied on Thursday that MTN had paid for any visit by him to Iran. "This is absolutely fallacious. Defence was never bankrupt when I was there." However, he confirmed one or more visits "in my official capacity" to Iran, and he confirmed that "in one of those visits it coincided with the MTN people also travelling there -- they did form part of the South African delegation going there". "I had meetings with the relevant minister and I think even the head of state … but at no stage did I have any meetings with the cellphone company MTN, I was never in any meeting. I had no obligation or, in fact, no power to negotiate anything on behalf of MTN. I think MTN negotiated their business with their counterparts quite independent of their mission. I could not have made any promises to the Iranian government on defence co-operation without going through Cabinet."
Later, confronted with a specific allegation that he had met his Iranian counterpart in the presence of MTN officials, he conceded that "when official business had been done … we might have been entertained, and that the businesspeople that may have been part of this visit may have been part of that". "I deny that there was any negotiations around MTN's business interests by the ministry of defence led by myself." Lekota denied that he would have promised any weapons outside of the arms control committee's approvals that would have to follow. "I never made any commitments of the nature you are suggesting." In the end, and once Iran had handed the licence to MTN, it seems whatever promises about defence materiel may have been made, came to naught.
In March 2007, a year and half after MTN was awarded the licence, MTN began facing even greater pressure from its Iranian partners to deliver on some of its defence and nuclear-related promises. MTN's representative in Iran, Chris Kilowan, sent a memo to Nhleko from the Iranians calling on the company to deliver on its defence promises. "[MTN's chief executive Nhleko] should attempt as a matter of urgency to contact the president of South Africa and impress upon him that the failure to resolve the defence matters to the satisfaction of Iran will have severe negative repercussions for MTN," read the memo attached as an exhibit. The "highly confidential" memo recounts Saloojee's description of visits to South Africa by top Iranian officials on behalf of supreme leader Ayatollah Ali Khamenei and President Mahmoud Ahmadinejad.
Khamenei dispatched Ali Larijani, then the secretary of Iran's Supreme National Security Council, to remind Mbeki "that certain defence-related promises were made by the South African minister of defence in 2004 in exchange for which MTN was allowed to replace Turkcell in the Irancell consortium". The same memo reports that Manouchehr Mottaki, then Iran's foreign minister, was sent by Ahmadinejad to "get a direct answer" from Mbeki about South Africa's alleged promises to sell arms to Iran. Kilowan wrote in the memo: "Mottaki reiterated their understanding that MTN was allowed to replace Turkcell in exchange for defense co-operation."
On the UN Security Council vote, the memo said: "It is now a matter of public record what happened to the vote on Saturday … that South Africa also voted in favour of the sanctions." The memo also relates Saloojee's concerns. "The Iranians did not expect the voting to go otherwise, although they were hopeful that South Africa would at least abstain. As it is, South Africa is now seen as having made a U-turn on the matter and we will have to closely monitor the reaction of the Iranians to the fact." MTN also found itself being threatened in late 2007 by "Long John" for not delivering on its promises. Mbeki's spokesperson, Mukoni Ratshitanga, told the M&G: "Former president Thabo Mbeki does not believe that he should oblige attempts to drag his name into this matter and will therefore not comment."
The Votes: International Atomic Energy Agency and the United Nations
Throughout 2004 and 2005, at the same time that MTN was lobbying hard to displace Turkcell, Iran came under intense pressure over its nuclear enrichment programme. The international community had repeatedly voted against the state before the International Atomic Energy Authority and the UN Security Council, calling on it to meet its obligations under the Nuclear Non-Proliferation Treaty. In fact, as Turkcell detailed, from 2004 to 2008, South Africa largely joined the votes against Iran except for a brief hiatus at the end of 2005 and the beginning of 2006, which coincided with the November 2005 license award. "MTN learned that the Iranians understood South Africa to play a critical role in being able to lead the 'non-aligned' nations on nuclear votes in international bodies," Turkcell stated. And so, Turkcell claims, the cellphone giant orchestrated an "informal" meeting between Mbeki and Iran's nuclear chief, Hassan Rowhani, at a dinner at Mbeki's Cape Town residence. "MTN paid for adviser Rowhani to stay at a hotel in Cape Town, sponsored the large dinner party, and covered all travel logistics," Turkcell claims. "Consistent with MTN's promises, the president assured adviser Rowhani that the South African government would support Iran at the [International Atomic Energy Authority]." But Mbeki, through his spokesperson, refused to comment on this account.
That September, when the International Atomic Energy Authority board found Iran not to be complying with its non-proliferation treaty obligations, South Africa abstained. Come November 20, Turkcell detailed, MTN expected it was to be awarded the licence. Instead, the Iranians are said to have delivered the message that should South Africa vote against Iran at a crucial November 24 vote before the IAEA, it would "cause trouble".
The decision the IAEA has to make was on whether to refer Iran to the UN Security Council for breaching the NPT. This appears to have sent the company's mavericks into a bit of a spin. It is alleged they approached Saloojee, who approached South African ambassador to the IAEA Abdul Minty. Other frantic calls were made, and as it happened, South Africa abstained from the vote. Three days later the Iranians issued the GSM license to MTN.
The M&G was unable to reach Minty on Thursday, but when he was approached on the matter in February, he strenuously denied having been influenced: "At no point did [MTN] approach me to influence me in any direction." According to him, South Africa's policy on Iran at the IAEA had been "very consistent". After being awarded the 49% stake, MTN made good on its promises to its 51% shareholder, carrying all its costs. MTN agreed to pay the IEDC's $88-million capital share of MTN Irancell as well as their share of the $300-million licence fee.
The Iranian partners were clear that they were not willing to pay any "interest" on, or put up security for, a "loan". Charnley presented the proposed arrangement to MTN. Rob Nisbett, the chief financial officer, was apparently shocked at the proposal and refused to permit the deal on "improper and unsecured terms". He insisted that a formal loan agreement be negotiated and entered into with the parties. He also threatened to resign if this was not done.
On November 15 2005 MTN Group directed its subsidiary, MTN International (Mauritius) Ltd, to enter into sham "loan" agreements with the IEDC. Nisbett still voiced concern about this arrangement and informed the executive team that the "loans" put MTN at huge risk. Nhleko issued Nisbett with a formal written warning for opposing the financial terms and was instructed to authorise the transaction. Documents show MTN made the "loans" through a series of complex "round trip" agreements by shifting the funds around between the IEDC, MTN-Irancell, and MTN Group, which it then recorded on its books as loans. By the time the loans were due, MTN-Irancell was highly profitable -- $118-million profit in 2007, $234-million in 2008, $516-million in 2009, $583-million in 2010 and at least $503-million projected for 2011.
Charnley did not respond to numerous messages left on her cellphone and with an assistant in her office. An automatic message at Saloojee's office -- the South African embassy in Oman where he is ambassador -- said staff did not work on Thursdays, and emails were not answered. Spokespeople for Nhleko and Ramaphosa said they would pass on the M&G's respective messages, but neither responded in time for print deadline.
Department of International Affairs and Cooperation spokesperson Clayson Monyela could not be reached, but last month he denied that any company had influence over South Africa's foreign policy. Calls to Iran's embassy in South Africa were placed on hold, after which no calls were answered.
MTN and its legal advisers were locked in all-day meetings yesterday, filing its JSE news service (Sens) announcement only at 5.30pm in response to the explosive claims made by Turkcell in a lawsuit filed in the Washington Federal Court at 2am South African time.
Africa's largest cellphone operator said the claim had still not been served, but that it would oppose it. The company reiterated that there was "no legal merit" to Turkcell's claim and no basis for such a claim to be brought before a United States court. It also noted the South African government's denial of the allegations that MTN exercised influence over it. In advance of Turkcell filing its claim, MTN announced the formation of an independent committee, under the chairmanship of internationally renowned jurist Lord Hoffmann, to investigate Turkcell's allegations. The Hoffmann committee has already begun its investigations and will report its findings to the MTN board, with any recommendations on actions to be taken as a result of its findings, including their publication. "The Hoffmann committee has invited Turkcell to participate in its investigation, but Turkcell has to date not done so," MTN said in the statement. "The invitation remains open to Turkcell to participate in the Hoffmann committee's investigation."
Turkcell has been threatening to take MTN to the US courts for corruption since February 2, but held out for a settlement from MTN first before it filed. MTN has been calling its bluff by refusing to settle out of court, claiming extortion. Turkcell has argued that MTN has many business interests in the US and that the cellphone company has violated the Alien Tort Statute, a 1789 law that gives US courts jurisdiction in some instances to consider claims by foreigners for illegal conduct that occurred in another country. The law is usually cited in human rights and torture cases.
Meanwhile, Turkcell was yesterday dealing with its own set of issues relating to infighting among its board and shareholders. Reuters reported that the board met to discuss its structure and independent board members. Having founded Turkcell in 1994, Mehmet Emin Karamehmet is locked in a boardroom struggle with the other main shareholders in Turkcell: Altimo and Nordic telecommunications group TeliaSonera.
Turkcell's board has seven members. The three main shareholders -- Cukurova, Altimo and TeliaSonera -- each has two seats. Chairperson Colin Williams is the designated independent board member. Altimo and TeliaSonera want him replaced because they say he sides with Cukurova, Reuters reports. TeliaSonera has a 37% stake in Turkcell, whereas Altimo has a 13.2% stake it bought from Karamehmet in 2005. However, Cukurova's 13.8% stake carries controlling rights because of Turkcell's structure.
Source: Mail & Guardian
Wednesday, March 7, 2012
Why ANC’s policy reboot is flawed
The ANC has proposed a sweeping overhaul of policy governing SA’s technology sector. For the most part, the proposals are reasonably business-friendly and should be welcomed. But the lingering conviction that state intervention will ensure the delivery of services to all is still a cause for concern.
The proposals, contained in one of a series of hefty discussion documents released this week ahead of the party’s national policy conference in June, generally make for pretty good reading. Clearly, a lot of thought has gone into identifying the challenges facing the sector and what needs to be done to ensure all South Africans get access to high-speed broadband and the benefits that access brings, including a faster-growing economy. The ruling party must be commended for identifying the requirement for greater competition in the sector and the need to expand the number of players with access to scarce radio frequency spectrum to deliver next-generation broadband services. It’s a surprisingly centrist policy position paper (with a few exceptions) for a party that leans well to the left in the political spectrum.
In other respects, though, the discussion document is rather naive, in that it ignores the role that well-financed incumbent operators — such as MTN, Telkom, Vodacom and Cell C — can play in building the next-generation networks that will expand access to more South Africans. In deference no doubt to its socialist alliance partners, it’s also silent on the pressing need to privatise Telkom fully, to free its management team from the dead hand of the state that limits its ability to restructure itself meaningfully in a competitive market. Rather, it talks about setting up a second Telkom (my choice of words) by merging two lame-duck state-owned enterprises, Sentech and Broadband Infraco. This focus on state-owned enterprises spoils what is otherwise a fairly well-argued overview of the challenges facing the sector and how to grow it.
Neither Sentech nor Infraco deserves the special attention they enjoy in the document. Both have failed to prove their raison d’être. Sentech’s previous effort at building a broadband network was so spectacularly unsuccessful that it should never be given another chance to screw it up and waste taxpayers’ money. And Infraco, the brainchild of that misguided communist and former cabinet minister Alec Erwin, admits freely that the company is struggling to remain competitive where private-sector players are undercutting its prices. Infraco’s assets should be sold off to the highest bidder.
Public enterprises minister Malusi Gigaba would do the country a favour by flogging off Infraco to a company that can make more efficient use of its infrastructure. It’s unfortunate, then, that privatisation is anathema to Gigaba, who appears more interested in building a political power base through an ever-expanding role for the state-owned enterprises in his portfolio.
The ANC’s discussion paper should be lauded for proposing that spectrum allocations — especially in the important 800MHz and 2,6GHz frequency bands that will be used for fourth-generation mobile broadband services — will be used to foster new infrastructure competition in the sector. But the party is placing a little too much emphasis on encouraging new players into the infrastructure game without asking who will invest the billions of rand needed. Though fostering competition is laudable, the ANC should remember it’s the incumbent operators that have the financial and technical ability to build these networks. Excluding them from the process could ultimately do more damage than good. Balance is imperative.
That said, the discussion paper is an important step forward. At the very least, it deserves rigorous interrogation and debate.
Source: TechCentral
The proposals, contained in one of a series of hefty discussion documents released this week ahead of the party’s national policy conference in June, generally make for pretty good reading. Clearly, a lot of thought has gone into identifying the challenges facing the sector and what needs to be done to ensure all South Africans get access to high-speed broadband and the benefits that access brings, including a faster-growing economy. The ruling party must be commended for identifying the requirement for greater competition in the sector and the need to expand the number of players with access to scarce radio frequency spectrum to deliver next-generation broadband services. It’s a surprisingly centrist policy position paper (with a few exceptions) for a party that leans well to the left in the political spectrum.
In other respects, though, the discussion document is rather naive, in that it ignores the role that well-financed incumbent operators — such as MTN, Telkom, Vodacom and Cell C — can play in building the next-generation networks that will expand access to more South Africans. In deference no doubt to its socialist alliance partners, it’s also silent on the pressing need to privatise Telkom fully, to free its management team from the dead hand of the state that limits its ability to restructure itself meaningfully in a competitive market. Rather, it talks about setting up a second Telkom (my choice of words) by merging two lame-duck state-owned enterprises, Sentech and Broadband Infraco. This focus on state-owned enterprises spoils what is otherwise a fairly well-argued overview of the challenges facing the sector and how to grow it.
Neither Sentech nor Infraco deserves the special attention they enjoy in the document. Both have failed to prove their raison d’être. Sentech’s previous effort at building a broadband network was so spectacularly unsuccessful that it should never be given another chance to screw it up and waste taxpayers’ money. And Infraco, the brainchild of that misguided communist and former cabinet minister Alec Erwin, admits freely that the company is struggling to remain competitive where private-sector players are undercutting its prices. Infraco’s assets should be sold off to the highest bidder.
Public enterprises minister Malusi Gigaba would do the country a favour by flogging off Infraco to a company that can make more efficient use of its infrastructure. It’s unfortunate, then, that privatisation is anathema to Gigaba, who appears more interested in building a political power base through an ever-expanding role for the state-owned enterprises in his portfolio.
The ANC’s discussion paper should be lauded for proposing that spectrum allocations — especially in the important 800MHz and 2,6GHz frequency bands that will be used for fourth-generation mobile broadband services — will be used to foster new infrastructure competition in the sector. But the party is placing a little too much emphasis on encouraging new players into the infrastructure game without asking who will invest the billions of rand needed. Though fostering competition is laudable, the ANC should remember it’s the incumbent operators that have the financial and technical ability to build these networks. Excluding them from the process could ultimately do more damage than good. Balance is imperative.
That said, the discussion paper is an important step forward. At the very least, it deserves rigorous interrogation and debate.
Source: TechCentral
Friday, February 24, 2012
8ta struggles in competitive market
Earlier this week, Blue Label Telecoms, the largest distributor of prepaid vouchers and airtime in SA, revealed that 8ta accounts for well under 1% of its airtime revenues. Vodacom, MTN and Cell C contribute 53%, 34% and 10% respectively.
There was little doubt 8ta, which was launched in 2010 after Telkom disposed of its 50% stake in Vodacom, would have an uphill battle gaining market share. With the Vodacom and MTN brands so deeply entrenched in consumers’ minds, and with Cell C pouring hundreds of millions of rand into marketing its new corporate brand and network, it was never going to be an easy ride.
The market is mature, especially on the voice side, meaning 8ta would have to lure consumers across from the other networks. With a more limited coverage map and a marketing budget much smaller than its bigger rivals, it was always going to be tough going. That 8ta is falling short of Telkom’s expectations is no secret. But can SA’s fourth mobile network make any meaningful impact in SA telecoms in the long term?
Irnest Kaplan, MD at Kaplan Equity Analysts, says it’s not necessarily a case of 8ta doing anything wrong, but “more of a function of the time at which it entered the market”. He says consumers often forget that there are networks beyond Vodacom and MTN and that even Cell C has only recently begun to get traction in the minds of the general public. Aside from the problems of brand awareness, Kaplan says 8ta has had problems with distribution and that while this is normal for a newcomer, MTN and Vodacom have had “many years to build deep distribution networks that go right down to the rural level”.
With the SA cellular market so saturated, 8ta has to look to churn — customers leaving other networks — for customers. “8ta has to offer a really compelling reason to switch, particularly for the high-spending segment of the market. Most customers won’t switch for a 10% discount on calls.” The other problem 8ta faces is that it’s part of Telkom, and for many consumers that leaves a bad taste, Kaplan says. That connection alone will have some consumers assuming 8ta’s network isn’t as good as its competitors’. “Even low-end subscribers worry about the same thing.”
Kaplan says Telkom’s early predictions of capturing 15% of the SA mobile market are not only far too optimistic — as of September 2011 the company claimed 1,9% — but “those types of projections don’t say what kind of 15% share. Will it be the low-end of the income scale or the high-end? And if it’s a mixture, what portion is accounted for by which segment?”
8ta has said it hoped to leverage Telkom’s fixed-line serves by offering converged services, which suggests the move into mobile may be more defensive than an active assault on MTN and Vodacom, according to Kaplan. Denis Smit, MD at BMI-TechKnowledge, says Telkom recently began recruiting for a new mobile MD when many thought senior managing executive Amith Maharaj was tipped for the position. Smit says this suggests the board wants stronger and more decisive leadership.
Though 8ta has engaged in aggressive pricing in an effort to win customers, Brian Neilson, research director and head of telecoms consulting at BMI-T, says Cell C has been similarly aggressive, even before 8ta’s entry to the market, and that Vodacom and MTN have gone some way to responding to 8ta’s offerings “which dilutes their effect”. While an active subscriber base of 1,1m isn’t to be scoffed at, and 8ta certainly reached the 1m milestone in less time than it took Cell C, what is worrying is that of these subscribers more than 882 000 are prepaid users, and the average revenue per prepaid user in Telkom’s last set of financial results in September 2011 was R20,47. This is a fraction of the figures enjoyed by its rivals.
8ta has been very aggressive in its pricing and in its marketing campaigns, but the question is how long it can keep pouring money into building market share. It will have to keep investing in advertising and promotions and needs to do this before it can even consider trying to improve average revenues per user. Also, it’s going to have to work hard to win over the big spenders, because most of the people going to 8ta at present are clearly those looking for deals, and these are also often the most price-sensitive users who are just as likely to leave when there’s a better offer elsewhere.
Source: — Craig Wilson, TechCentral
There was little doubt 8ta, which was launched in 2010 after Telkom disposed of its 50% stake in Vodacom, would have an uphill battle gaining market share. With the Vodacom and MTN brands so deeply entrenched in consumers’ minds, and with Cell C pouring hundreds of millions of rand into marketing its new corporate brand and network, it was never going to be an easy ride.
The market is mature, especially on the voice side, meaning 8ta would have to lure consumers across from the other networks. With a more limited coverage map and a marketing budget much smaller than its bigger rivals, it was always going to be tough going. That 8ta is falling short of Telkom’s expectations is no secret. But can SA’s fourth mobile network make any meaningful impact in SA telecoms in the long term?
Irnest Kaplan, MD at Kaplan Equity Analysts, says it’s not necessarily a case of 8ta doing anything wrong, but “more of a function of the time at which it entered the market”. He says consumers often forget that there are networks beyond Vodacom and MTN and that even Cell C has only recently begun to get traction in the minds of the general public. Aside from the problems of brand awareness, Kaplan says 8ta has had problems with distribution and that while this is normal for a newcomer, MTN and Vodacom have had “many years to build deep distribution networks that go right down to the rural level”.
With the SA cellular market so saturated, 8ta has to look to churn — customers leaving other networks — for customers. “8ta has to offer a really compelling reason to switch, particularly for the high-spending segment of the market. Most customers won’t switch for a 10% discount on calls.” The other problem 8ta faces is that it’s part of Telkom, and for many consumers that leaves a bad taste, Kaplan says. That connection alone will have some consumers assuming 8ta’s network isn’t as good as its competitors’. “Even low-end subscribers worry about the same thing.”
Kaplan says Telkom’s early predictions of capturing 15% of the SA mobile market are not only far too optimistic — as of September 2011 the company claimed 1,9% — but “those types of projections don’t say what kind of 15% share. Will it be the low-end of the income scale or the high-end? And if it’s a mixture, what portion is accounted for by which segment?”
8ta has said it hoped to leverage Telkom’s fixed-line serves by offering converged services, which suggests the move into mobile may be more defensive than an active assault on MTN and Vodacom, according to Kaplan. Denis Smit, MD at BMI-TechKnowledge, says Telkom recently began recruiting for a new mobile MD when many thought senior managing executive Amith Maharaj was tipped for the position. Smit says this suggests the board wants stronger and more decisive leadership.
Though 8ta has engaged in aggressive pricing in an effort to win customers, Brian Neilson, research director and head of telecoms consulting at BMI-T, says Cell C has been similarly aggressive, even before 8ta’s entry to the market, and that Vodacom and MTN have gone some way to responding to 8ta’s offerings “which dilutes their effect”. While an active subscriber base of 1,1m isn’t to be scoffed at, and 8ta certainly reached the 1m milestone in less time than it took Cell C, what is worrying is that of these subscribers more than 882 000 are prepaid users, and the average revenue per prepaid user in Telkom’s last set of financial results in September 2011 was R20,47. This is a fraction of the figures enjoyed by its rivals.
8ta has been very aggressive in its pricing and in its marketing campaigns, but the question is how long it can keep pouring money into building market share. It will have to keep investing in advertising and promotions and needs to do this before it can even consider trying to improve average revenues per user. Also, it’s going to have to work hard to win over the big spenders, because most of the people going to 8ta at present are clearly those looking for deals, and these are also often the most price-sensitive users who are just as likely to leave when there’s a better offer elsewhere.
Source: — Craig Wilson, TechCentral
Monday, January 23, 2012
Consumer probe unlawful – MTN
An investigation by the National Consumer Commission into MTN’s subscriber agreements and service quality was unlawful, the cellular operator argued before the National Consumer Tribunal on Friday. It also said a compliance notice issued to MTN by the consumer watchdog was sent to the wrong party. The hearing is the first under the Consumer Protection Act (CPA), which was implemented in April last year.
MTN is challenging a compliance order notice it received compelling it to amend its subscriber agreements and align its practices with the act. The commission has asked for a fine of 10 percent of MTN’s 2011 turnover if it is found guilty of contravening sections of the act.
Robby Coelho, a partner at law firm Webber Wentzel representing MTN, said the commission had acted beyond the powers granted by the act and therefore its investigation was unlawful. MTN said the commission had ruled against it based on an incorrect and outdated subscriber agreement even though it had implemented a new CPA-compliant contract.
Mamodupi Mohlala, the national consumer commissioner, said at the time the notice was issued in August that MTN’s amended customer contract was not yet in effect, which it should have been from April 1. Mohlala said the new contract still did not comply with section 63 of the act because it did not guarantee quality of service targets and make pricing transparent.
Advocate Alfred Cockerill, representing MTN, argued that the commission had incorrectly issued the compliance notice to MTN instead of MTN Service Provider. “If we are correct, and we believe we are, then that’s the end of the matter. The entire compliance notice (would be) invalid,” Coelho said.
Mohlala said, however, that MTN, the mother body, was licensed to provide telecoms services and not its subsidiary, MTN Service Provider, and if the latter was reprimanded then “the consumer doesn’t have recourse”. “We have also noted, in terms of their contract provision of network services, the subsidiary is not licensed to provide network services,” she said.
The tribunal did not specify a date for judgment. Hearings have also been set for other companies, including Vodacom, Cell C and TopTV.
Source: madeasy.co.za
MTN is challenging a compliance order notice it received compelling it to amend its subscriber agreements and align its practices with the act. The commission has asked for a fine of 10 percent of MTN’s 2011 turnover if it is found guilty of contravening sections of the act.
Robby Coelho, a partner at law firm Webber Wentzel representing MTN, said the commission had acted beyond the powers granted by the act and therefore its investigation was unlawful. MTN said the commission had ruled against it based on an incorrect and outdated subscriber agreement even though it had implemented a new CPA-compliant contract.
Mamodupi Mohlala, the national consumer commissioner, said at the time the notice was issued in August that MTN’s amended customer contract was not yet in effect, which it should have been from April 1. Mohlala said the new contract still did not comply with section 63 of the act because it did not guarantee quality of service targets and make pricing transparent.
Advocate Alfred Cockerill, representing MTN, argued that the commission had incorrectly issued the compliance notice to MTN instead of MTN Service Provider. “If we are correct, and we believe we are, then that’s the end of the matter. The entire compliance notice (would be) invalid,” Coelho said.
Mohlala said, however, that MTN, the mother body, was licensed to provide telecoms services and not its subsidiary, MTN Service Provider, and if the latter was reprimanded then “the consumer doesn’t have recourse”. “We have also noted, in terms of their contract provision of network services, the subsidiary is not licensed to provide network services,” she said.
The tribunal did not specify a date for judgment. Hearings have also been set for other companies, including Vodacom, Cell C and TopTV.
Source: madeasy.co.za
Thursday, December 8, 2011
Upping the ante, 8ta extends 10GB loss leader
The loss-leading broadband special offer from 8ta, its 10GB of data for R199/month package, has been extended until mid-2012, it said on Thursday. The product, which is only available on a 24-month contract, has been in the market since June.
The 10GB package remains the cheapest capped mobile broadband offering in SA, with an effective cost-per-megabyte of less than 2c. For an additional R100/month, users can get an additional 10GB to be used between midnight and 5am.
It had been expected that the special offer would only be in the market for a few months. 8ta, which is owned by Telkom, is able to offer the low-cost package because, unlike its rivals, its network is still relatively empty. The offer only applies to users in 8ta coverage zones and does not extend to those roaming onto the MTN network.
Telkom launched 8ta, SA’s fourth mobile network operator, in 2010.
Source: TechCentral
The 10GB package remains the cheapest capped mobile broadband offering in SA, with an effective cost-per-megabyte of less than 2c. For an additional R100/month, users can get an additional 10GB to be used between midnight and 5am.
It had been expected that the special offer would only be in the market for a few months. 8ta, which is owned by Telkom, is able to offer the low-cost package because, unlike its rivals, its network is still relatively empty. The offer only applies to users in 8ta coverage zones and does not extend to those roaming onto the MTN network.
Telkom launched 8ta, SA’s fourth mobile network operator, in 2010.
Source: TechCentral
Monday, October 17, 2011
No hope for 'crashed' Blackberry users
A LEGAL expert believes that BlackBerry users are unlikely to find consumer protection as underlined by national consumer commissioner Mamodupi Mohlala last week. The crash of the phone's e-mail and messenger services began last Monday, affecting users in Europe, the Middle East, Africa, India, Brazil, Chile and Argentina, and spreading to North America by Tuesday. Research In Motion (RIM), the company behind BlackBerry smartphones said the problem was sorted on Thursday.
Commissioner Mohlala said consumers would find protection under sections 55, 56 and 61 of the Consumer Protection Act, which provides rights on the quality of goods, and liability for damage caused by goods.
However, Albert Aukema, associate in the competition practice at Cliffe Dekker Hofmeyr underlined the difference between goods and services, saying the outage was a services issue. "Although the scope of these sections have yet to be interpreted by the courts, it is unlikely that such a challenge would be in line with the provisions of the CPA. "If anything, the interruptions should accurately be categorised as impacting on the quality of the service being rendered to consumers," said Aukema. "The interruption appears to have been unrelated to defects in the handsets supplied to consumers as part of the service offering."
Meanwhile, a number of SA-based mobile operators (MTN R10 to each customer and Vodacom 20 minutes of calls and 20 SMS's on Vodacom to Vodacom service) moved to provide some form of compensation to BlackBerry customers, "as a token of goodwill".
Source: Mail & Guardian
Notes:
In the article above, it is mentioned that "Commissioner Mohlala said consumers would find protection under sections 55, 56 and 61 of the Consumer Protection Act ("the act"), which provides rights on the quality of goods, and liability for damage caused by goods." It is also mentioned that "it is unlikely that ... a challenge would be in line with the provisions of the CPA. ... If anything, the interruptions should accurately be categorised as impacting on the quality of the service being rendered to consumers."
Legislation must be interpreted to promote the spirit, purport and objects of the Bill of Rights. Interpretation and application of the law under the Constitution is never a mechanical application of rules; it always involves a value judgment. Our Constitution and law are infused with moral values. The days of denying the value-laden content of law are long gone. See Maphango and Others v Aengus Lifestyle Properties (Pty) Ltd (CCT 57/11) [2012] ZACC 2 (13 March 2012) at 151.
In our view, it is important to read the provisions in Part H (fair value, quality and safety) of the act as a whole to intepret any provision contained in that part.
It is similarly important to apply a purposive interpretation to the provisions. By applying such an interpretation, it is important to read Chapter 1 of the act, which deals with the interpretation, purpose and application of the act. It is thus incorrect to apply a mechanical application of traditional (un-transformed) rules of interpretation.
Chapter 2 of the act deals with fundamental consumer rights. The chapter is divided into parts, each part dealing with an aspect of as the consumer's right as follows:
Part A: The right of equality in the consumer market
Part B: The right to privacy
Part C: The right to choose
Part D: The right to disclose and information
Part E: The right to fair and responsible marketing
Part F: The right to fair and honest dealings
Part G: The right to fair, just and reasonable terms and conditions
Part H: The right to fair value, quality and safety
Part I: The right to accountability
Section 55 of the the act deals with the consumer's right to safe, good quality goods. Section 56 deals with the implied warranty of quality of goods supplied.
Section 61 of the the act deals with liability for damage caused by goods. The section provides that "the producer or importer, distributor or retailer of any goods is liable for any harm ... caused wholly or partly as a consequence of -
(a) supplying any unsafe goods;
(b) a product failure, defect or hazard in any goods; or
(c) inadequate instructions or warnings provided to the consumer pertaining to any hazard arising from or associated with the use of any goods,irrespective of whether the harm resulted from any negligence on the part of the producer, importer, distributor or retailer, as the case may be."
Section 61(2) of the act provides that "a supplier of services who, in conjunction with the performance of those services, applies, supplies, installs or provides access to any goods, must be regarded as a supplier of those goods to the consumer, for the purposes of this section."
Section 61(5) of the act provides that "[h]arm for which a person may be held liable in terms of this section includes -
(a) the death of, or injury to, any natural person;
(b) an illness of any natural person;
(c) any loss of, or physical damage to any property, irrespective of whether it is movable or immovable; and
(d) any economic loss that results from harm contemplated in paragraph (a), (b) or (c).
It is important to note that the article above ommits a reference to section 54 of the act, which deals with the consumer's right to demand quality service. The section reads as follows:
"(1) When a supplier undertakes to perform any services for or on behalf of a consumer, the consumer has a right to-
(a) the timely performance and completion of those services, and timely notice of any unavoidable delay in the performance of the services;
(b) the performance of the services in a manner and quality that persons are generally entitled to expect;
(c) the use, delivery or installation of goods that are free of defects and of a quality that persons are generally entitled to expect, if any such goods are required for performance of the services; and
(d) the return of any property or control over any property of the consumer in at least as good a condition as it was when the consumer made it available to the supplier for the purpose of performing such services, having regard to the circumstances of the supply, and any specific criteria or conditions agreed between the supplier and the consumer before or during the performance of the services.
(2) If a supplier fails to perform a service to the standards contemplated in subsection (1), the consumer may require the supplier to either-
(a) remedy any defect in the quality of the services performed or goods supplied; or
(b) refund to the consumer a reasonable portion of the price paid for the services performed and goods supplied, having regard to the extent of the failure."
We therefore do not agree with Albert Aukema, associate in the competition practice at Cliffe Dekker Hofmeyr, that "it is unlikely that ... a challenge would be in line with the provisions of the [act]." It is apparent that Aukema has applied on outdated rule of interpretation in his analysis of the act.
Whilst the interpretation of the act by Aukema may favour the service provider, at the prejudice of the consumer, it is unlikely to find favour with a transformed court that promotes the spirit, purport and objects of the Bill of Rights, contained within the Consititution of South Africa.
Commissioner Mohlala said consumers would find protection under sections 55, 56 and 61 of the Consumer Protection Act, which provides rights on the quality of goods, and liability for damage caused by goods.
However, Albert Aukema, associate in the competition practice at Cliffe Dekker Hofmeyr underlined the difference between goods and services, saying the outage was a services issue. "Although the scope of these sections have yet to be interpreted by the courts, it is unlikely that such a challenge would be in line with the provisions of the CPA. "If anything, the interruptions should accurately be categorised as impacting on the quality of the service being rendered to consumers," said Aukema. "The interruption appears to have been unrelated to defects in the handsets supplied to consumers as part of the service offering."
Meanwhile, a number of SA-based mobile operators (MTN R10 to each customer and Vodacom 20 minutes of calls and 20 SMS's on Vodacom to Vodacom service) moved to provide some form of compensation to BlackBerry customers, "as a token of goodwill".
Source: Mail & Guardian
Notes:
In the article above, it is mentioned that "Commissioner Mohlala said consumers would find protection under sections 55, 56 and 61 of the Consumer Protection Act ("the act"), which provides rights on the quality of goods, and liability for damage caused by goods." It is also mentioned that "it is unlikely that ... a challenge would be in line with the provisions of the CPA. ... If anything, the interruptions should accurately be categorised as impacting on the quality of the service being rendered to consumers."
Legislation must be interpreted to promote the spirit, purport and objects of the Bill of Rights. Interpretation and application of the law under the Constitution is never a mechanical application of rules; it always involves a value judgment. Our Constitution and law are infused with moral values. The days of denying the value-laden content of law are long gone. See Maphango and Others v Aengus Lifestyle Properties (Pty) Ltd (CCT 57/11) [2012] ZACC 2 (13 March 2012) at 151.
In our view, it is important to read the provisions in Part H (fair value, quality and safety) of the act as a whole to intepret any provision contained in that part.
It is similarly important to apply a purposive interpretation to the provisions. By applying such an interpretation, it is important to read Chapter 1 of the act, which deals with the interpretation, purpose and application of the act. It is thus incorrect to apply a mechanical application of traditional (un-transformed) rules of interpretation.
Chapter 2 of the act deals with fundamental consumer rights. The chapter is divided into parts, each part dealing with an aspect of as the consumer's right as follows:
Part A: The right of equality in the consumer market
Part B: The right to privacy
Part C: The right to choose
Part D: The right to disclose and information
Part E: The right to fair and responsible marketing
Part F: The right to fair and honest dealings
Part G: The right to fair, just and reasonable terms and conditions
Part H: The right to fair value, quality and safety
Part I: The right to accountability
Section 55 of the the act deals with the consumer's right to safe, good quality goods. Section 56 deals with the implied warranty of quality of goods supplied.
Section 61 of the the act deals with liability for damage caused by goods. The section provides that "the producer or importer, distributor or retailer of any goods is liable for any harm ... caused wholly or partly as a consequence of -
(a) supplying any unsafe goods;
(b) a product failure, defect or hazard in any goods; or
(c) inadequate instructions or warnings provided to the consumer pertaining to any hazard arising from or associated with the use of any goods,irrespective of whether the harm resulted from any negligence on the part of the producer, importer, distributor or retailer, as the case may be."
Section 61(2) of the act provides that "a supplier of services who, in conjunction with the performance of those services, applies, supplies, installs or provides access to any goods, must be regarded as a supplier of those goods to the consumer, for the purposes of this section."
Section 61(5) of the act provides that "[h]arm for which a person may be held liable in terms of this section includes -
(a) the death of, or injury to, any natural person;
(b) an illness of any natural person;
(c) any loss of, or physical damage to any property, irrespective of whether it is movable or immovable; and
(d) any economic loss that results from harm contemplated in paragraph (a), (b) or (c).
It is important to note that the article above ommits a reference to section 54 of the act, which deals with the consumer's right to demand quality service. The section reads as follows:
"(1) When a supplier undertakes to perform any services for or on behalf of a consumer, the consumer has a right to-
(a) the timely performance and completion of those services, and timely notice of any unavoidable delay in the performance of the services;
(b) the performance of the services in a manner and quality that persons are generally entitled to expect;
(c) the use, delivery or installation of goods that are free of defects and of a quality that persons are generally entitled to expect, if any such goods are required for performance of the services; and
(d) the return of any property or control over any property of the consumer in at least as good a condition as it was when the consumer made it available to the supplier for the purpose of performing such services, having regard to the circumstances of the supply, and any specific criteria or conditions agreed between the supplier and the consumer before or during the performance of the services.
(2) If a supplier fails to perform a service to the standards contemplated in subsection (1), the consumer may require the supplier to either-
(a) remedy any defect in the quality of the services performed or goods supplied; or
(b) refund to the consumer a reasonable portion of the price paid for the services performed and goods supplied, having regard to the extent of the failure."
We therefore do not agree with Albert Aukema, associate in the competition practice at Cliffe Dekker Hofmeyr, that "it is unlikely that ... a challenge would be in line with the provisions of the [act]." It is apparent that Aukema has applied on outdated rule of interpretation in his analysis of the act.
Whilst the interpretation of the act by Aukema may favour the service provider, at the prejudice of the consumer, it is unlikely to find favour with a transformed court that promotes the spirit, purport and objects of the Bill of Rights, contained within the Consititution of South Africa.
Friday, October 14, 2011
MTN & Vodacom to refund customers
After days of frustrations, BlackBerry users will be reimbursed for the internet time lost during the network break down. Cellphone operators under their own discretion will give customers free airtime. BlackBerry maker Research In Motion (RIM) blamed a core switch failure inside its network for the black out. The three day long failure affected four continents including Africa and Asia.
MTN's Mike Fairon said their customers will receive R10 each.
While Vodacom’s Richard Borman said their clients will also be reimbursed. “We’re going to give people 20 minutes of calls Vodacom to Vodacom next week and 20 SMSes,” Borman added.
Source: Eye Withness News
MTN's Mike Fairon said their customers will receive R10 each.
While Vodacom’s Richard Borman said their clients will also be reimbursed. “We’re going to give people 20 minutes of calls Vodacom to Vodacom next week and 20 SMSes,” Borman added.
Source: Eye Withness News
Thursday, September 15, 2011
Operators face showdown at the consumer corral
The National Consumer Commission, established in April to enforce the new Consumer Protection Act, has received objections from all of SA’s big operators, with the exception of Neotel, to the compliance notices it served on them demanding they make the terms of their contracts clearer to consumers.
Head of the commission, Mamodupi Mohlala, initially set a deadline of mid-September for operators to comply with its demands for transparency in advertising, non-automatic renewal of contracts and the ability for consumers to cancel contracts by giving 20 days’ notice, as stipulated by the act. To date, only Neotel has agreed to amend its contracts.
Vodacom recently expressed its opposition to the compliance notices, claiming it was already in talks with the commission regarding amendments to its contracts and advertising. The company’s chief officer for corporate affairs, Portia Maurice, said recently the company was “surprised” to receive a compliance notice because it “already had an amendment process underway and had agreed with [the commission to] an implementation date of 31 October”.
Mohlala says the commission received objection notices from Cell C and MTN on Wednesday, and that it expected objections from Telkom and its mobile arm, 8ta, to follow. The commission has been arguing with Vodacom about issues of quality of service for some time. “In terms of section 54 of the act, which deals with issues of quality of service, a consumer is entitled to receive goods or services at levels to which that consumer is accustomed, or at the levels as stipulated in the consumer’s contract,” Mohlala tells TechCentral.
She says the issue is of growing relevance in light of Vodacom’s recent network failure and the furore earlier this week regarding its announcement that it would be throttling data speeds of heavy users of the BlackBerry Internet Service. Vodacom has since backtracked on its stated plans, with group CEO Pieter Uys blaming miscommunication by its corporate communications department. “In terms of these compliance notices, we as the commission are saying there must be some guarantees with regards to quality of service. Currently, as the operators’ contracts stand, there are no guarantees,” says Mohlala.
She says consumers are expected to “hold up their end of the agreements” by paying for services and paying additional fees in the case of premium services, but there “are no reciprocal guarantees from network operators around quality of service”.
The consumer act specifies that in the event that an operator does not meet the “particular quality-of-service levels that are outlined in a contact”, then the it “must offer the affected consumer a remedy”, she says. If not, “the consumer is entitled to a refund to the extent that they have not received the guaranteed services or quality of service. Consumers must be compensated when operators don’t meet their obligations.”
According to Mohlala, operators have “exclusive control over issues of network coverage and quality of service” and therefore need to give “some sort of commitment to consumers who are paying a lot for those services”.
She says the compliance notices served on the operators also deal with the provisions of section 14 of the act. This refers to the bundling of services. The act says the “bundling of services is not prohibited, but operators must clearly show the benefits of a bundled service to consumers. Over and above that, they must show the financial benefits to the consumer.”
Under the act, operators are obliged to make explicit and explain “in simple terms” what the unbundled costs of a service would be when compared to the bundled offering. “The obvious argument operators are going to put forward is that they don’t have absolute control over the services or over the full value chain of bundled services,” she says. “But we are saying to some extent, in relation to the product and services that they do offer, they have exclusive control over airtime [and] they have a responsibility to demonstrate the benefits of the various elements of the bundled service.”
Mothibi Ramusi, Cell C’s executive head of regulatory affairs, says the company objected to notice it received because it believes there was “no merit in issuing a compliance notice as Cell C’s subscriber agreement is compliant with the act”.
Vodacom’s Maurice says the operator intends to “address the matter” of the compliance notice it received “directly with the commission”. And Robert Madzonga, chief corporate services officer at MTN SA, says the compliance notice called for it to “adopt wording proposed by the commission” in its contracts and that it has “formally objected to the notice on various legitimate grounds”.
“MTN has asked the [national consumer] tribunal to set the notice aside,” Madzonga says. “Amongst other things, MTN contends the notice was issued at a time when the subscriber agreement was in fact compliant; that the notice is based on an outdated and incorrect version of the subscriber agreement; and that the wording proposed in the notice is inappropriate.”
He says that should the tribunal refuse to set aside the notice, “MTN has asked that the terms of the notice ought to be varied so as to allow a proper timeframe for compliance”.
Source: — Craig Wilson, TechCentral
Head of the commission, Mamodupi Mohlala, initially set a deadline of mid-September for operators to comply with its demands for transparency in advertising, non-automatic renewal of contracts and the ability for consumers to cancel contracts by giving 20 days’ notice, as stipulated by the act. To date, only Neotel has agreed to amend its contracts.
Vodacom recently expressed its opposition to the compliance notices, claiming it was already in talks with the commission regarding amendments to its contracts and advertising. The company’s chief officer for corporate affairs, Portia Maurice, said recently the company was “surprised” to receive a compliance notice because it “already had an amendment process underway and had agreed with [the commission to] an implementation date of 31 October”.
Mohlala says the commission received objection notices from Cell C and MTN on Wednesday, and that it expected objections from Telkom and its mobile arm, 8ta, to follow. The commission has been arguing with Vodacom about issues of quality of service for some time. “In terms of section 54 of the act, which deals with issues of quality of service, a consumer is entitled to receive goods or services at levels to which that consumer is accustomed, or at the levels as stipulated in the consumer’s contract,” Mohlala tells TechCentral.
She says the issue is of growing relevance in light of Vodacom’s recent network failure and the furore earlier this week regarding its announcement that it would be throttling data speeds of heavy users of the BlackBerry Internet Service. Vodacom has since backtracked on its stated plans, with group CEO Pieter Uys blaming miscommunication by its corporate communications department. “In terms of these compliance notices, we as the commission are saying there must be some guarantees with regards to quality of service. Currently, as the operators’ contracts stand, there are no guarantees,” says Mohlala.
She says consumers are expected to “hold up their end of the agreements” by paying for services and paying additional fees in the case of premium services, but there “are no reciprocal guarantees from network operators around quality of service”.
The consumer act specifies that in the event that an operator does not meet the “particular quality-of-service levels that are outlined in a contact”, then the it “must offer the affected consumer a remedy”, she says. If not, “the consumer is entitled to a refund to the extent that they have not received the guaranteed services or quality of service. Consumers must be compensated when operators don’t meet their obligations.”
According to Mohlala, operators have “exclusive control over issues of network coverage and quality of service” and therefore need to give “some sort of commitment to consumers who are paying a lot for those services”.
She says the compliance notices served on the operators also deal with the provisions of section 14 of the act. This refers to the bundling of services. The act says the “bundling of services is not prohibited, but operators must clearly show the benefits of a bundled service to consumers. Over and above that, they must show the financial benefits to the consumer.”
Under the act, operators are obliged to make explicit and explain “in simple terms” what the unbundled costs of a service would be when compared to the bundled offering. “The obvious argument operators are going to put forward is that they don’t have absolute control over the services or over the full value chain of bundled services,” she says. “But we are saying to some extent, in relation to the product and services that they do offer, they have exclusive control over airtime [and] they have a responsibility to demonstrate the benefits of the various elements of the bundled service.”
Mothibi Ramusi, Cell C’s executive head of regulatory affairs, says the company objected to notice it received because it believes there was “no merit in issuing a compliance notice as Cell C’s subscriber agreement is compliant with the act”.
Vodacom’s Maurice says the operator intends to “address the matter” of the compliance notice it received “directly with the commission”. And Robert Madzonga, chief corporate services officer at MTN SA, says the compliance notice called for it to “adopt wording proposed by the commission” in its contracts and that it has “formally objected to the notice on various legitimate grounds”.
“MTN has asked the [national consumer] tribunal to set the notice aside,” Madzonga says. “Amongst other things, MTN contends the notice was issued at a time when the subscriber agreement was in fact compliant; that the notice is based on an outdated and incorrect version of the subscriber agreement; and that the wording proposed in the notice is inappropriate.”
He says that should the tribunal refuse to set aside the notice, “MTN has asked that the terms of the notice ought to be varied so as to allow a proper timeframe for compliance”.
Source: — Craig Wilson, TechCentral
Saturday, August 13, 2011
A cellular licence to print money
The proverbial licence to print money is not the chain of casinos or bottle stores of a generation ago. It’s the telecommunications company, exploiting the now universal desire for people to be online and electronically in touch. This is a sector that generates massive revenues. Vodacom, South Africa’s biggest network provider with 26.6-million customers, in the past year turned over R54bn and almost doubled its net profits to R8bn. International player MTN, with 18.8m local subscribers, increased profits by 20% and had SA revenues of around R37bn.
This is also the sector that draws the most consumer complaints, along with the pharmaceutical/healthcare industries, retail and banking. It is then logical that the new National Consumer Commissioner, Mamodupi Mohlala, targeted telecommunication providers as a priority in implementing the recently passed Consumer Protection Act (CPA).
One of Mohlala’s first acts was to force SA’s four cellular network operators and two fixed-line providers to bring their customer contracts in line with the CPA. Despite knowing the intentions of the Act for five years, not a single one was compliant and, in most cases, 75% of their cellphone contracts were in breach.
Basically these companies were quite happy to take advantage of consumers – many illiterate and poor, and for whom a cellphone is a necessity that comes at a disproportionately large monthly cost – for as long as they could get away with. Since then Vodacom has come under further pressure from the commissioner, who ruled that it should compensate those of its subscribers who suffered financial loss when the Vodacom network collapsed a few months back. Vodacom has point-blank refused to comply. As an aside, Vodacom’s media liaison division failed to respond to repeated calls from this writer. Ironically, this is the company that sponsors an annual series of journalism awards.
Given the greed and arrogance that prevails, it should then come as no surprise that the cellular providers have since lobbied to be exempted from the CPA, on the grounds that they are already regulated by the Independent Communication Authority (Icasa). Fat lot of good Icasa would be. Writing in Business Report a few months ago, economic empowerment strategist Thabo Masombuko outlined a stinging assessment of ICASA’s consumer policing abilities, which have made the sector “a haven for tariff looting, exorbitant charges and ridiculous costs … While costs have ballooned, cellular and landline services have become an out-of-reach pie in the sky for millions of users.”
There is an established pattern to this. When cellular licences were first issued to Vodacom and MTN, part of their obligation was the rolling out of rural coverage as a development of national infrastructural that it was hoped would improve the countryside’s potential to create jobs. Unfortunately, it was an obligation only scrappily met, given the lure of lucrative urban rollouts — and the lovely tax from the resultantly dazzling profits — with the result two decades later of unreliable, low-speed rural coverage.
Nor has state entity Telkom, met its statutory obligation to provide countrywide communication systems. Faced with endemic cable theft, the Telkom’s outrageous solution has been simply to cut off both telephone and landline broadband services in rural areas, in favour of a wireless voice service that verges on the useless, in the view of its critics. By the Telkom example, this week’s theft of cabling serving the Gautrain would be dealt with by mothballing the service and suggesting that passengers use taxis instead.
The opportunity costs of these failures are enormous. The World Bank estimates that a 10% increase in broadband penetration delivers a 1.3% rise in economic growth. Is is however an unpalatable fact that in SA, just a dozen or so kilometres outside of the major cities and towns, broadband access is virtually unobtainable. And when available, SA’s mobile broadband remains prohibitively expensive, among the dearest in the world. This inertia and indifference by both the private sector and the state, impacts directly on government’s objective of providing the infrastructural backbone that will allow local communities to grow local jobs, instead of encouraging a growing flow of job seekers to the cities.
When Roy Padayachie took over the long-neglected Communications portfolio he set as his ministerial goal to partner with the private sector to harness telecommunications technology to economic growth. It’s a laudable but unrealisable dream, unless he can get the cellular providers to take their developmental responsibilities a little more seriously.
Source: Mail & Guardian Thought Leader: William Sauderson-Meyer
This is also the sector that draws the most consumer complaints, along with the pharmaceutical/healthcare industries, retail and banking. It is then logical that the new National Consumer Commissioner, Mamodupi Mohlala, targeted telecommunication providers as a priority in implementing the recently passed Consumer Protection Act (CPA).
One of Mohlala’s first acts was to force SA’s four cellular network operators and two fixed-line providers to bring their customer contracts in line with the CPA. Despite knowing the intentions of the Act for five years, not a single one was compliant and, in most cases, 75% of their cellphone contracts were in breach.
Basically these companies were quite happy to take advantage of consumers – many illiterate and poor, and for whom a cellphone is a necessity that comes at a disproportionately large monthly cost – for as long as they could get away with. Since then Vodacom has come under further pressure from the commissioner, who ruled that it should compensate those of its subscribers who suffered financial loss when the Vodacom network collapsed a few months back. Vodacom has point-blank refused to comply. As an aside, Vodacom’s media liaison division failed to respond to repeated calls from this writer. Ironically, this is the company that sponsors an annual series of journalism awards.
Given the greed and arrogance that prevails, it should then come as no surprise that the cellular providers have since lobbied to be exempted from the CPA, on the grounds that they are already regulated by the Independent Communication Authority (Icasa). Fat lot of good Icasa would be. Writing in Business Report a few months ago, economic empowerment strategist Thabo Masombuko outlined a stinging assessment of ICASA’s consumer policing abilities, which have made the sector “a haven for tariff looting, exorbitant charges and ridiculous costs … While costs have ballooned, cellular and landline services have become an out-of-reach pie in the sky for millions of users.”
There is an established pattern to this. When cellular licences were first issued to Vodacom and MTN, part of their obligation was the rolling out of rural coverage as a development of national infrastructural that it was hoped would improve the countryside’s potential to create jobs. Unfortunately, it was an obligation only scrappily met, given the lure of lucrative urban rollouts — and the lovely tax from the resultantly dazzling profits — with the result two decades later of unreliable, low-speed rural coverage.
Nor has state entity Telkom, met its statutory obligation to provide countrywide communication systems. Faced with endemic cable theft, the Telkom’s outrageous solution has been simply to cut off both telephone and landline broadband services in rural areas, in favour of a wireless voice service that verges on the useless, in the view of its critics. By the Telkom example, this week’s theft of cabling serving the Gautrain would be dealt with by mothballing the service and suggesting that passengers use taxis instead.
The opportunity costs of these failures are enormous. The World Bank estimates that a 10% increase in broadband penetration delivers a 1.3% rise in economic growth. Is is however an unpalatable fact that in SA, just a dozen or so kilometres outside of the major cities and towns, broadband access is virtually unobtainable. And when available, SA’s mobile broadband remains prohibitively expensive, among the dearest in the world. This inertia and indifference by both the private sector and the state, impacts directly on government’s objective of providing the infrastructural backbone that will allow local communities to grow local jobs, instead of encouraging a growing flow of job seekers to the cities.
When Roy Padayachie took over the long-neglected Communications portfolio he set as his ministerial goal to partner with the private sector to harness telecommunications technology to economic growth. It’s a laudable but unrealisable dream, unless he can get the cellular providers to take their developmental responsibilities a little more seriously.
Source: Mail & Guardian Thought Leader: William Sauderson-Meyer
Monday, July 18, 2011
Cellphone operators told to amend contracts
South Africa's four primary cellular network operators and two fixed-line providers will have new customer contracts that are compliant with the Consumer Protection Act in place within the next three months.This came as national consumer commissioner Mamodupi Mohlala prepared to sign consent order agreements this week with each of the companies, Business Report reported on Monday. These agreements were legally binding and a fine of R1 million or 10 percent of annual turnover could be imposed if they were breached.
Mohlala said that over the past two weeks the commission had reviewed all contracts provided by the individual companies and none of the contracts were compliant with the act. This, despite the fact that it had been in the pipeline for the past five years and its implementation was postponed from September last year to April this year. She said that in most cases about 75 percent of the cellphone contract terms and conditions would have to change.
Companies would have to change their billing systems, marketing approach and their staff would have to be educated and more skilled, which would require more spending on human resources, she said. "There is nothing untoward… we are aligning South Africa with international best practice."
Mohlala said Cell C, Telkom and 8.ta would have their contracts amended by the end of September, Neotel by next month and MTN and Vodacom both expected to have amended their contracts by the end of October.
Source: Times Live
Mohlala said that over the past two weeks the commission had reviewed all contracts provided by the individual companies and none of the contracts were compliant with the act. This, despite the fact that it had been in the pipeline for the past five years and its implementation was postponed from September last year to April this year. She said that in most cases about 75 percent of the cellphone contract terms and conditions would have to change.
Companies would have to change their billing systems, marketing approach and their staff would have to be educated and more skilled, which would require more spending on human resources, she said. "There is nothing untoward… we are aligning South Africa with international best practice."
Mohlala said Cell C, Telkom and 8.ta would have their contracts amended by the end of September, Neotel by next month and MTN and Vodacom both expected to have amended their contracts by the end of October.
Source: Times Live
Telecoms firms told to amend contracts
 |
| Mamodupi Mohlala |
This came as national consumer commissioner Mamodupi Mohlala prepared to sign consent order agreements this week with each of the companies. These agreements were legally binding and a fine of R1m or 10% of annual turnover could be imposed if they were breached.
Mohlala said that over the past two weeks the commission had reviewed all contracts provided by the individual companies and none of the contracts were compliant with the act. This, despite the fact that it had been in the pipeline for the past five years and its implementation was postponed from September last year to April this year. She said that in most cases about 75% of the cellphone contract terms and conditions would have to change.
Companies would have to change their billing systems, marketing approach and their staff would have to be educated and more skilled, which would require more spending on human resources, she said. “There is nothing untoward. We are aligning SA with international best practice.”
Mohlala said Cell C, Telkom and 8ta would have their contracts amended by the end of September, Neotel by next month and MTN and Vodacom both expected to have amended their contracts by the end of October.
Source: Techcentral
Friday, July 1, 2011
Vodacom cuts off about a million users
Vodacom, South Africa's biggest wireless phones operator, cut off about a million users on Friday for failing to register their SIM cards under a new law in the country. Under the new Regulation of Interception of Communication Act, mobile phone SIM cards must have been registered by 10pm GMT on Thursday to avoid being cut off from the network.
Vodacom, a unit of Britain's Vodafone, said under a million subscribers were disconnected from its network but spokesman Richard Boorman said the impact on revenue would be minimal. "Overall, I can say we're not expecting a major revenue impact," Boorman said, adding only a portion of those disconnected, frequently used their lines.
Vodacom's rival MTN declined to disclose how customers were locked out of the network but said initial indications showed that the numbers were not significant. "MTN is not in a position to disclose the figures of ... subscribers who have been cut off because MTN is in a closed period," Eddie Moyce, customer relationship executive at the operator's South African unit, said in an emailed response to Reuters questions.
MTN is finalising its half-year results and companies typically refrain from making comments on their balance sheets before the results are published. MTN has about 19-million subscribers in South Africa while Vodacom boasts about 26 million users in the country.
Source: Mail & Guardian
Vodacom, a unit of Britain's Vodafone, said under a million subscribers were disconnected from its network but spokesman Richard Boorman said the impact on revenue would be minimal. "Overall, I can say we're not expecting a major revenue impact," Boorman said, adding only a portion of those disconnected, frequently used their lines.
Vodacom's rival MTN declined to disclose how customers were locked out of the network but said initial indications showed that the numbers were not significant. "MTN is not in a position to disclose the figures of ... subscribers who have been cut off because MTN is in a closed period," Eddie Moyce, customer relationship executive at the operator's South African unit, said in an emailed response to Reuters questions.
MTN is finalising its half-year results and companies typically refrain from making comments on their balance sheets before the results are published. MTN has about 19-million subscribers in South Africa while Vodacom boasts about 26 million users in the country.
Source: Mail & Guardian
Thursday, June 30, 2011
Cellphone networks not working
Cellphone service providers Vodacom and MTN were having serious network problems on Thursday, the companies said. "We are currently experiencing network issues in some areas. Our engineering team is working hard to resolve the problem. We apologise to all affected customers," said Vodacom spokesperson Ashleigh Dubbelman.
The contact number provided was a Vodacom number, with no landline number supplied, so further details were not immediately available. However, the company used Twitter to apologise, reply to questions and post short updates, repeating several times that it was not related to the Rica deadline to register sim cards. "We're aware that certain customers are experiencing an inability to call or SMS. Sincere apologies, we're working on a fix :-/," one of the posts read.
In another post they wrote: "...there is a network wide issue on Voice and SMS that some customers are experiencing, we are attending to this." Technicians were working on the problem.
MTN echoed this, also offering apologies.
Source: Mail & Guardian
The contact number provided was a Vodacom number, with no landline number supplied, so further details were not immediately available. However, the company used Twitter to apologise, reply to questions and post short updates, repeating several times that it was not related to the Rica deadline to register sim cards. "We're aware that certain customers are experiencing an inability to call or SMS. Sincere apologies, we're working on a fix :-/," one of the posts read.
In another post they wrote: "...there is a network wide issue on Voice and SMS that some customers are experiencing, we are attending to this." Technicians were working on the problem.
MTN echoed this, also offering apologies.
Source: Mail & Guardian
Cellphone networks not working
Cellphone service providers Vodacom and MTN were having serious network problems on Thursday, the companies said. "We are currently experiencing network issues in some areas. Our engineering team is working hard to resolve the problem. We apologise to all affected customers," said Vodacom spokesperson Ashleigh Dubbelman.
The contact number provided was a Vodacom number, with no landline number supplied, so further details were not immediately available. However, the company used Twitter to apologise, reply to questions and post short updates, repeating several times that it was not related to the Rica deadline to register sim cards. "We're aware that certain customers are experiencing an inability to call or SMS. Sincere apologies, we're working on a fix :-/," one of the posts read.
In another post they wrote: "...there is a network wide issue on Voice and SMS that some customers are experiencing, we are attending to this." Technicians were working on the problem.
MTN echoed this, also offering apologies.
Source: Mail & Guardian -- Sapa
The contact number provided was a Vodacom number, with no landline number supplied, so further details were not immediately available. However, the company used Twitter to apologise, reply to questions and post short updates, repeating several times that it was not related to the Rica deadline to register sim cards. "We're aware that certain customers are experiencing an inability to call or SMS. Sincere apologies, we're working on a fix :-/," one of the posts read.
In another post they wrote: "...there is a network wide issue on Voice and SMS that some customers are experiencing, we are attending to this." Technicians were working on the problem.
MTN echoed this, also offering apologies.
Source: Mail & Guardian -- Sapa
Thursday, June 23, 2011
8ta drops broadband bomb on rivals
Telkom's new mobile operator, 8ta, has dropped a bomb on rivals Vodacom, MTN and Cell C, introducing a cut-rate broadband product offering 10GB of data a month for R199 on a 24-month contract. For an additional R100 per month, users will have 20GB of bandwidth -- 10GB plus an extra 10GB for use between midnight and 5am.
The 10GB package equates to an effective cost-per-megabyte of less than 2c, making it the most aggressive mobile broadband pricing in South Africa to date. The out-of-bundle rate is 30 cents per megabyte and no modem is included in the packages.
The offer will only work in areas where Telkom has built 8ta towers and will not work in areas where the company relies on roaming partner MTN for coverage. 8ta has almost 1 000 active mobile broadband base stations across the country, and has said it will have more than 2 000 by March next year.
Amith Maharaj, managing executive of Telkom Mobile, says consumers have expressed concern about the cost of mobile data and he believes 8ta's aggressive new pricing will help win over those customers. "Price has seemed to be the barrier to entry until now," Maharaj says.
He emphasises that the two new products are a special offer only. However, he won't say when the special offer will end. Customers who sign up for a 24-month contract are guaranteed the prices won't increase throughout the contract period. -- TechCentral
Source: Mail & Guardian
The 10GB package equates to an effective cost-per-megabyte of less than 2c, making it the most aggressive mobile broadband pricing in South Africa to date. The out-of-bundle rate is 30 cents per megabyte and no modem is included in the packages.
The offer will only work in areas where Telkom has built 8ta towers and will not work in areas where the company relies on roaming partner MTN for coverage. 8ta has almost 1 000 active mobile broadband base stations across the country, and has said it will have more than 2 000 by March next year.
Amith Maharaj, managing executive of Telkom Mobile, says consumers have expressed concern about the cost of mobile data and he believes 8ta's aggressive new pricing will help win over those customers. "Price has seemed to be the barrier to entry until now," Maharaj says.
He emphasises that the two new products are a special offer only. However, he won't say when the special offer will end. Customers who sign up for a 24-month contract are guaranteed the prices won't increase throughout the contract period. -- TechCentral
Source: Mail & Guardian
Monday, November 8, 2010
Vodacom boosts first-half profit, lifts dividend
Cellphone operator Vodacom said on Monday first-half earnings rose 38,4% and lifted its interim dividend 64%, due to the removal of one-time charges. The dominant cellphone operator in Africa's biggest economy, Vodacom has been overshadowed on the continent by MTN Group and faces new competition from former shareholder Telkom, which last month launched its own mobile unit.
Also on Monday, Vodacom said it had put on hold its plans for a listing in Tanzania. It is majority owned by Britain's Vodafone, which has so far failed to its implement plans to use the South African company as a springboard to the continent.
Vodacom said headline earnings per share for the six months to end-September rose to 303 cents from 218,7 cents, and at the top end of its own forecast range of 285 cents to 307 cents. Headline EPS is the main gauge of earnings in South Africa and strips out certain one-time and financial items.
Last year it was hit by a R3,2-billion write-down at its network and satellite services unit Gateway, acquired in 2008. The company said it expected full-year capital spending to be lower at R6,8-billion and that it had bought back R959-million of its shares as it looks to increase returns to shareholders.
Source: Mail & Guardian -- Reuters
Also on Monday, Vodacom said it had put on hold its plans for a listing in Tanzania. It is majority owned by Britain's Vodafone, which has so far failed to its implement plans to use the South African company as a springboard to the continent.
Vodacom said headline earnings per share for the six months to end-September rose to 303 cents from 218,7 cents, and at the top end of its own forecast range of 285 cents to 307 cents. Headline EPS is the main gauge of earnings in South Africa and strips out certain one-time and financial items.
Last year it was hit by a R3,2-billion write-down at its network and satellite services unit Gateway, acquired in 2008. The company said it expected full-year capital spending to be lower at R6,8-billion and that it had bought back R959-million of its shares as it looks to increase returns to shareholders.
Source: Mail & Guardian -- Reuters
Wednesday, September 2, 2009
Manyatshe appeals court decision in favour of M&G
The media should have no right to identify any person being investigated, especially criminally, before formal charges have been laid in a court of law, the Supreme Court of Appeal heard on Tuesday. The court was hearing an appeal by Maanda Manyatshe, former CEO of the South African Post Office (Sapo) and head of MTN South Africa, against a 2006 court decision in favour of the Mail & Guardian. "You cannot name a person when police do not want to name [that person]," Manyatshe's lawyer, Vincent Maleka, told the court.
The high court in Johannesburg had held in favour of the Mail & Guardian publishing an article concerning allegations of fraud, violations of tender rules and contraventions of the Public Finance Management Act at Sapo while Manyatshe was its head.
While Manyatshe was head of MTN South Africa he applied unsuccessfully for an interdict to prevent the newspaper from publishing the article. Shortly thereafter he resigned his post at the cellphone company to clear his name.
Maleka asked the Supreme Court of Appeal to extend the rules of law that guide the balance between freedom of speech and a person's right to privacy, dignity and reputation. He submitted it should be wrong to name anyone being investigated, without exception, before formal charges had been formulated in court. Maleka said Manyatshe's fundamental rights were violated by the publication of the article.
The M&G's lawyer, Danny Berger, submitted that all past legal matters on the subject of defamation had already "established the law". Berger argued that the rule extension contemplated by Manyatshe would seriously affect the balance already established in law between freedom of speech and a person's right to dignity. He also submitted that the appeal was doubtful as the offending article had long been published. Even if the appeal was successful it would have no practical effect or result for Manyatshe, he said.
The SCA reserved judgement.
The high court in Johannesburg had held in favour of the Mail & Guardian publishing an article concerning allegations of fraud, violations of tender rules and contraventions of the Public Finance Management Act at Sapo while Manyatshe was its head.
While Manyatshe was head of MTN South Africa he applied unsuccessfully for an interdict to prevent the newspaper from publishing the article. Shortly thereafter he resigned his post at the cellphone company to clear his name.
Maleka asked the Supreme Court of Appeal to extend the rules of law that guide the balance between freedom of speech and a person's right to privacy, dignity and reputation. He submitted it should be wrong to name anyone being investigated, without exception, before formal charges had been formulated in court. Maleka said Manyatshe's fundamental rights were violated by the publication of the article.
The M&G's lawyer, Danny Berger, submitted that all past legal matters on the subject of defamation had already "established the law". Berger argued that the rule extension contemplated by Manyatshe would seriously affect the balance already established in law between freedom of speech and a person's right to dignity. He also submitted that the appeal was doubtful as the offending article had long been published. Even if the appeal was successful it would have no practical effect or result for Manyatshe, he said.
The SCA reserved judgement.
Thursday, November 27, 2008
Try to upgrade at your peril
I'm not convinced I want a smartphone but I have a constant headache from lugging my 17kg iBook everywhere I go. And my iPod. And my Sony Ericsson phone. And chargers for all three. So, I decided that the advertising must be right: I need a phone that can browse, handle email and drown out the guy beside me on the Jo'burg to Cape Town red-eye. Apparently South Africa's major providers of mobile telephony disagree.
I think it's time the Competition Commission looked at the industry because it's clear to me that there is not a competitive market for high-end cellular services. It started with the iPhone. When my contract with Vodacom expired I decided to wait until the advent of the Jesus handset before renewing it. When Christmas came, some time in September, I wandered into a gleaming flourescent kiosk at Cape Town's waterfront and asked for one. "Oh, you don't want one of those, it's really just a toy," said the guy behind the counter. This surprised me as I had read that it was a mobile computer. But he had lots of gel in his hair and a black shirt with lilac pinstripes, so I figured he must be right.
On his advice I wandered over to a nearby Vodashop -- different name, slightly less fluorescent, more handsets on display, actually the same chain -- and I got the same advice. Apparently the i was not the Phone I'd been waiting for. That would be the Blackberry Bold. Better email, no pesky touch-screen typing, lovely display. It would be available in a month. So I reconciled myself to the Sony, with its paltry battery life, wonky charger and pointless email support, while I waited a bit longer. I wanted to be the smug dude who had eschewed Steve Job's wunderwerk for the less obvious alternative. Eventually the Vodasmurf called: "We've got the Blackberry Bold," he said, squeaky with excitement, "but they are going fast, so come quickly."
I needed no more encouragement to drop my work, womble over to the retail cave and fondle the thing. "I'll take it," I said, "if you give me a discount." "Done," he replied after a quick call to the Vodahub, and there it all began to go wrong. There was a systems snarl-up in the Vodabrain, the "dealsheet" was not forthcoming. I should come back in an hour, no, a day, or three. Or a week. They would keep the handset, and the paperwork, against my return. But they didn't, and there were no more Bold Blackberries to be had in the land. The Vodaserf, let's call him Julian, because that's his name, was nowhere to be found. Transferred, or on leave, or wherever they go when they leave the retail cave. "Don't worry," said the other smurfs. "We'll have more next month, but you'll have to pay more because the rand has weakened."
I threatened to "churn" to MTN, taking my fat monthly bill with me. Actually, I tried. I looked for a Yello shop but I don't think there are any. Then I sent an email via the bit of the Yello website that says subscribe. Then I called the telephone number for people who want to sign up for contracts, got lost in a thicket of voicemail prompts and promptly gave up.
Months have gone by since I started trying to upgrade, and my shoulder is getting worse. I keep getting SMSes from the Vodabrain telling me of the wonderful world that awaits me when I re-up with it. A nice Vodasmurfette, who we will call Lesa because that is how she spells her name, promised a fortnight ago to make it all better, but nothing has happened.
So MTN doesn't want me, Vodacom takes me for granted and neither Virgin nor Cell-C are my type. I am switching to pay-as-you-go; at least you know what kind of relationship you are getting into.
Source: Mail & Guardian
I think it's time the Competition Commission looked at the industry because it's clear to me that there is not a competitive market for high-end cellular services. It started with the iPhone. When my contract with Vodacom expired I decided to wait until the advent of the Jesus handset before renewing it. When Christmas came, some time in September, I wandered into a gleaming flourescent kiosk at Cape Town's waterfront and asked for one. "Oh, you don't want one of those, it's really just a toy," said the guy behind the counter. This surprised me as I had read that it was a mobile computer. But he had lots of gel in his hair and a black shirt with lilac pinstripes, so I figured he must be right.
On his advice I wandered over to a nearby Vodashop -- different name, slightly less fluorescent, more handsets on display, actually the same chain -- and I got the same advice. Apparently the i was not the Phone I'd been waiting for. That would be the Blackberry Bold. Better email, no pesky touch-screen typing, lovely display. It would be available in a month. So I reconciled myself to the Sony, with its paltry battery life, wonky charger and pointless email support, while I waited a bit longer. I wanted to be the smug dude who had eschewed Steve Job's wunderwerk for the less obvious alternative. Eventually the Vodasmurf called: "We've got the Blackberry Bold," he said, squeaky with excitement, "but they are going fast, so come quickly."
I needed no more encouragement to drop my work, womble over to the retail cave and fondle the thing. "I'll take it," I said, "if you give me a discount." "Done," he replied after a quick call to the Vodahub, and there it all began to go wrong. There was a systems snarl-up in the Vodabrain, the "dealsheet" was not forthcoming. I should come back in an hour, no, a day, or three. Or a week. They would keep the handset, and the paperwork, against my return. But they didn't, and there were no more Bold Blackberries to be had in the land. The Vodaserf, let's call him Julian, because that's his name, was nowhere to be found. Transferred, or on leave, or wherever they go when they leave the retail cave. "Don't worry," said the other smurfs. "We'll have more next month, but you'll have to pay more because the rand has weakened."
I threatened to "churn" to MTN, taking my fat monthly bill with me. Actually, I tried. I looked for a Yello shop but I don't think there are any. Then I sent an email via the bit of the Yello website that says subscribe. Then I called the telephone number for people who want to sign up for contracts, got lost in a thicket of voicemail prompts and promptly gave up.
Months have gone by since I started trying to upgrade, and my shoulder is getting worse. I keep getting SMSes from the Vodabrain telling me of the wonderful world that awaits me when I re-up with it. A nice Vodasmurfette, who we will call Lesa because that is how she spells her name, promised a fortnight ago to make it all better, but nothing has happened.
So MTN doesn't want me, Vodacom takes me for granted and neither Virgin nor Cell-C are my type. I am switching to pay-as-you-go; at least you know what kind of relationship you are getting into.
Source: Mail & Guardian
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