HILARY GUSH Johannesburg | Friday
A long-running legal battle over the award of South Africa’s lucrative third mobile phone licence to Cell-C took a new twist on Friday, when losing bidder NextCom said it would settle the case out of court.
But the row over whether the selection process for the licence winner was flawed was not yet over, with judgement in a judicial review delayed until June 8 to allow the two parties time to finalise the out-of-court settlement.
Uncertainty surrounding the award of the permit has tarnished South Africa’s image at a time when it is opening up the telecoms market to competition and ahead of the fourth quarter initial public offering of utility Telkom, analysts say.
The country has been punished in bond and currency markets for every signal of uncertainty over its commitment to privatisation.
Paul Doany, chief adviser for Cell-C, said Hong Kong-backed NextCom had dropped its objections to Cell-C’s victory in the race for the licence at the Pretoria High Court on Friday.
NextCom Chief Executive Bushy Kelobonye confirmed the move. “NextCom has withdrawn. We have reached a settlement.”
He declined to give details of the deal, but industry players said it could mean that the NextCom, backed by Distacom of Hong Kong, would take a stake in Cell-C, or accept a cash settlement.
Kelobonye said NextCom might still have some issues to iron out with some of its directors over the decision to settle.
The judicial review was ordered by the High Court last year after NextCom complained that government officials had tried to influence the selection process for the licence, which was awarded in February after a more than 18-month delay.
The licence allows the winner to enter the rapidly growing and eight million-strong local subscriber market. It was originally due in July 1999, but was delayed by complex court battles amid allegations of government interference.
Cell C – backed by Middle Eastern conglomerate Saudi Oger and U.S. group Verizon – has said it would roll out the network before the end of the year at a cost of $600 million over five years. – Reuters
ZA*FEATURES:
Cell C saga’s extra dimensions May 9, 2001