WirelessG CEO Carel van der Merwe said that some of Vodacom’s claims about WirelessG’s finances are “only an effort to mislead the reader”.
Vodacom recently responded to WirelessG filed an urgent court application in January 2013, arguing that WirelessG’s legal action is merely an attempt to save the company which is facing significant financial problems.
Vodacom highlighted that WirelessG will lose R1.4 million in revenue after February 2013 because two contracts come to an end:
- Vodacom’s five year retail agreement to resell WirelessG retail products where Vodacom paid WirelessG R300,000 per month;
- A “binding agreement” in which WirelessG was contracted by Vodacom to supply guest WiFi services to the Southern Sun group where Vodacom paid WirelessG R1.1 million per month.
Vodacom’s Tlhabeli Ralebitso said that the legal action by WirelessG is a desperate attempt to save the company, considering that it is losing its two main revenue drivers at the end of the month.
WirelessG CEO Carel van der Merwe hits back
Van der Merwe hit back, saying that it is not wrong for a director to be desperate.
“As co-directors of WirelessG, it is in fact both Tlhabeli Ralebitso and my fiduciary obligation to be desperate to see that the terms of the shareholders agreement are properly executed,” said van der Merwe.
The WirelessG CEO provided the following feedback about Vodacom’s response and subsequent media reports about the issue:
WirelessG and Vodacom never intended to do small business. Vodacom even gave WirelessG the right to sell its entire data network to Telkom as early as 2008. Vodacom had to and is still trying to prevent the execution of this kind of arrangements.
Vodacom`s misleading statements have to stand the test in court. One statement that will most definitely not stand the test in court is their misleading statements on certain investments nor will they stand the test that they have delivered our benefits.
The court case is not about the retail agreement. The retail agreement was a relative small ad hoc service we were contracted for and Vodacom had to pay for.
It is also not about the Southern Sun agreement that has been lost by Vodacom due to their uncompetitive pricing. It is only an effort to mislead the reader.
The only relevance these agreements have to the court case, is the fact that both confirm the exclusivity terms as intended by the parties in the shareholders agreement.
Our dispute is about specific undelivered benefits that have been paid for by the other shareholders of WirelessG. The uncomfortable fact Vodacom has to deal with is that they cannot provide Wi-Fi to their customers independently from WirelessG.
With this in mind – if there is scope that Wi-Fi will provide a sustainable business opportunity for Vodacom, it will most certainly provide the same opportunity to WirelessG.
WirelessG has 10 days to file its response to Vodacom’s submission.