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SPTC, MTN smoke peace pipe

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EZULWINI – Swazi MTN and SPTC on Friday reached an out-of-court settlement in the dispute arising from the latter’s sale and marketing of mobile phone products.

The settlement was reached at an arbitration meeting held in Ezulwini.

It entails that SPTC will pay Swazi MTN at least E30 million in respect of compensation in their protracted dispute over mobile telephony service products.

SPTC stands for Swazi-land Posts and Telecommunications Corporation.

A joint statement released by the two entities confirmed the settlement but did not go into detail regarding the actual amount of money involved.

The statement read, "The parties to the arbitration proceedings, acting in good faith and in mutual respect, successfully negotiated and concluded a settlement agreement between themselves which brought the matter to finality. It is the intention of the parties to work towards re-establishing working relationships in the best interests of the industry, parties themselves and above all, the Swazi nation."

It was signed by Rob Cloete, Chairman of the SPTC Board of Directors and David Dlamini, Chairman of the Swazi MTN board.

A well-placed source said the settlement, which is inclusive of legal costs, is only in respect of damages claimed by Swaazi MTN, and has no bearing on the court order.

"The court order still stands," confided the source.

In July, the mobile network operator (MTN) filed a claim with the International Court of Arbitration demanding a maximum of E534 million, which was later amended to a minimum of E57m, from SPTC.

The bone of contention was a Joint Venture Agreement (JVA) between the two telecommunication giants, which Swazi MTN felt the latter had breached when the telecommunications utility ventured in a mobile communication business through its two products, namely: One mobile phones and the Wireless Fixedfones.

An out of court settlement is an agreement reached between parties pending a lawsuit that resolves the dispute to their mutual satisfaction and occurs without judicial intervention, supervision and approval. Such an agreement, according to a legal expert, provides that the parties relinquish their rights to pursue judicial remedies.

Sifiso Nyembe, SPTC Corporate and Communications Manager, said he was not privy to the contents of deliberations at the arbitration meeting held on Friday.

"At the moment I still do not have information relating to the meeting, try the MD he may come to your assistance," he reasoned.

Amon Dlamini, SPTC Managing Director (MD) chose to play his cards close to the chest when contacted on the latest turn of events, saying whatever transpired at the meeting still had to be communicated to his superiors.

"I will choose not to comment on the issue," he said.

Meanwhile Ambrose Dlamini, Swazi MTN MD said he was in a meeting and referred all questions pertaining to the settlement to the organisation’s Corporate Affairs office.

"The unfortunate thing is that in the position I am in right now, it is not possible to say anything. I am in a meeting," he said.

The JVA which established Swazi MTN in 1998, gives exclusive rights for mobile phone services to the company.

Trouble arose when SPTC vigorously introduced the two products to the market, stealing the hearts of many consumers who found them affordable because of their reduced costs. The products enjoyed overwhelming response such that almost every household in the country has one of the mobile components of SPTC.

At some point, it was reported that there were 50 000 fixed-wireless customers, 14 000 ONE mobile phone customers and 10 000 users of mobile internet dongles.

Swazi MTN retaliated by taking the matter up with the courts, where they ultimately recorded victory.

This was when the International Court of Arbitration (ICA) issued a ruling in favour of Swazi MTN.

SPTC started rolling out the mobile components of its Next Generation Network in 2010.

The judgment, which was issued by the ICA, ordered SPTC to terminate its mobile component of the network and services operated by it. This included mobile data services or functions that are in competition with Swazi MTN, as well as voice and any other text messaging services.

SPTC was also ordered to cease advertising or promoting such, as long as it was signatory to the JVA.

The two companies entered into the JVA in 1998, which established MTN as the sole mobile company in the country.

SPTC has a majority shareholding of 41 per cent at Swazi MTN while MTN International has 33 per cent.

Swazi Empowerment Limited has 19 per cent while 10 per cent is held by an esteemed shareholder.

When the ruling was made in favour of Swazi MTN by the courts, the mobile phone company filed claims of compensation in respect of damages suffered while SPTC operated the disputed products.

On the amended claim, which the newspaper has in its possession, Swazi MTN had indicated that as a result of SPTC venturing into the mobile network business the company suffered a "loss of subscribers."

The company said it incurred a loss of E137.3m, as a result of this.

Furthermore, the mobile phone company also claimed that it suffered a loss of revenue basis, which was calculated to be in the range of E141.8m to E534m.

 

Thirdly, the company said it suffered a loss arising from the ONE network ranging from E72.4m to 101m.

MTN also claimed that it lost revenue ranging between E57m and E80.6m which could have been solicited from potential subscribers.

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