[In The Know]

  Cape broadband project stumbles

Author:
Nicola Mawson and Damaria Senne
Issued:
5 Apr 2007

A LEGAL WRANGLE is holding up the City of Cape Town's wireless broadband project, in a dispute that could take years to resolve. The tender, worth between R25 million and R30 million over three years, was awarded on 12 December to a consortium consisting of network operator MTN and IT company Cornastone.

Mike Brierley

Telkom subsequently appealed the decision. Roll-out of the network could be substantially delayed as a result, notes a lawyer. Telkom group executive for corporate communications Lulu Letlape says the City of Cape Town is still considering Telkom's appeal, and the operator cannot comment further.

Lufuno Nevhutalu, chairman of Cornastone, says as the objection process is under way, the company cannot comment on the matter.

Telkom's objections to the tender centre on two issues: The first is that, while the Electronic Communications Act has replaced the Telecommunications Act, the original regulations are still in force, meaning the municipality has to connect through a licensed public telephone service network. Telkom also claims it was not informed it did not make the original shortlist.

MTN Network Services CEO Mike Brierley says the company cannot comment directly on Telkom's complaint regarding the bid. However, he did say the matter illustrates Telkom's bullying tactics. Brierley says the City of Cape Town tender is part of MTN Network Services' strategy of partnering with municipalities on wireless networks. The company, which has also bid for a City of Johannesburg tender, says it is also looking at opportunities in Limpopo and Ethekwini.

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