Customers lose out on rollout delays
Telkom is confident that its robust Procurement Policy and the process of applying it will stand up to scrutiny, despite recent attempts to challenge tenders issued by the company in court.
Last week the High Court granted an interim interdict pending the finalisation of a dispute resolution process between Telkom and ZTE Mzansi. Pending the outcome of the dispute resolution process, Telkom is interdicted from implementing the tender and concluding any service level agreement with the bidders.
While Telkom is committed to finding a resolution to the dispute as soon as is practically possible, the Company is concerned at the recent trend of challenging the awarding of key tenders in the courts.
This often has serious consequences for customers by stalling rollout plans unnecessarily, says the Company.
Telkom Group CEO Nombulelo Moholi today said: "It is Telkom's Procurement Policy and Procedures that are on trial here. I am confident that they will not be found wanting."
"Telkom is often considered to be fair game by losing bidders who may feel entitled to be awarded business by the Company. We are often taken to court on review without any foundation whatsoever.
"Whilst one has rights to challenge administrative actions, unfortunately, the loser in this case is the end user, our customers who have to wait for months on end, and sometimes even years, to receive quality service.
"Meanwhile, Telkom will undoubtedly be accused of poor or late execution of network solutions to the advantage of our competitors," said Ms Moholi.
During July 2011 Telkom published a tender (RFP 0328/2011) for the provision of a Multi Services Access Node ("MSAN"). ZTE Mzansi ("ZTE") had submitted a bid but was not shortlisted because it failed to meet certain technical critical criteria during the evaluation process.
Telkom awarded the RFP to Huawei and Alcatel-Lucent Technologies on 21 November 2011, after having followed a fair, open and transparent procurement process, which process was also validated by external auditors. Telkom upholds the highest standard of governance in its procurement processes.
The agreements were concluded, and the delivery of the first MSAN units was announced on 28 March. This network upgrade will deliver the long-awaited higher speed broadband and fibre to the curb and/or premises.
During January 2012, ZTE served an application upon Telkom seeking to restrain Telkom from implementing RFP 0328/2011 in terms of an interim interdict, pending the finalisation of a dispute resolution process. Telkom and Alcatel–Lucent opposed the application.
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Telkom is a leading communications services provider in South Africa and on the African continent. We had consolidated normalised operating revenue from continuing operations of R33.4 billion and normalised profit for the year from continuing operations of R2.4 billion for the year ended 31 March 2011. Total assets from continuing operations amounted to R54.3 billion and equity attributable to the owners of Telkom to R29.6 billion as of 31 March 2011. The group generated normalised free cash flow of R3.5 billion for the year ended 31 March 2011.
We had consolidated operating revenue from continuing operations of R16.4 billion and profit for the period from continuing operations of R502 million for the six months ended 30 September 2011. Total assets amounted to R52.4 billion and equity attributable to the owners of Telkom to R29.1 billion as of 30 September 2011. The group generated free cash flow of R1.5 billion for the six months ended 30 September 2011.
As of 30 September 2011, we had approximately 4.1 million telephone access lines in service and 99.9% of our telephone access lines were connected to digital exchanges. We offer business, residential and payphone customers a wide range of services and products, including:
- fixed-line subscription and connection services to post-paid, prepaid and private payphone customers using PSTN (Public Switched Telephone Network) lines, including ISDN (Integrated Services Digital Network) lines, and the sale of the subscription based value-added voice services and customer premises equipment rental and sales;
- fixed-line traffic services to post-paid, prepaid, and payphone customers, including local, long distance, fixed-to-mobile, international outgoing and international voice-over-internet protocol traffic services;
- interconnection services, including terminating and transiting traffic from South African mobile operators, as well as from international operators and transiting traffic from mobile to international destinations;
- fixed-line data centre operations and internet services,including domestic and international data transmission services, such as point-to-point leased lines, ADSL (Asymmetrical Digital Subscriber Line) services, packet-based services, managed data networking services and internet access and related information technology services;
- e-commerce, including internet access service provider, application service provider, hosting, data storage, e-mail and security services;
- W-CDMA (Wideband Code Division Multiple Access), a 3G next generation network, including fixed voice services, data services and nomadic voice services;
- mobile communication services, including voice services, data services and handset sales through its mobile brand called 8•ta; and
- other services including directory services, through Trudon (Proprietary) Limited, wireless data services, through Swiftnet (Proprietary) Limited and internet services outside South Africa, through iWayAfrica Group (integration of Africa Online Limited and MWEB Africa Limited).