{"id":30118,"date":"2013-01-20T23:48:07","date_gmt":"2013-01-20T21:48:07","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=30118"},"modified":"2013-01-21T09:28:59","modified_gmt":"2013-01-21T07:28:59","slug":"vodacom-vs-wirelessg-billion-rand-blunder-or-storm-in-a-teacup","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/mobile\/30118\/vodacom-vs-wirelessg-billion-rand-blunder-or-storm-in-a-teacup\/","title":{"rendered":"Vodacom vs WirelessG: billion rand blunder or storm in a teacup?"},"content":{"rendered":"<p><a title=\"WirelessG\" href=\"http:\/\/businesstech.co.za\/forum\/showthread.php\/2205-WirelessG\">WirelessG<\/a> and six other applicants have filed an urgent court application against <a title=\"Vodacom\" href=\"http:\/\/businesstech.co.za\/forum\/showthread.php\/1639-Vodacom\">Vodacom<\/a>, arguing that Vodacom is not in compliance with its shareholding agreement with WirelessG.<\/p>\n<p>The court application focusses on three main issues, which WirelessG argues is costing them millions in lost revenue and damages.<\/p>\n<ul>\n<li>Vodacom is not permitted to provide Wi-Fi independently from WirelessG &#8211; <em>WirelessG said that Vodacom is offering Wi-Fi services, and is using other companies to offer Wi-Fi without giving them first right of refusal as agreed upon;<\/em><\/li>\n<\/ul>\n<ul>\n<li>Vodacom is obliged to offer WirelessG`s Wi-Fi as an integral part of its data bundles \u2013 <em>Vodacom is not doing it, which Wireless said has cost them R174 million, to date, and R7 million per month;<\/em><\/li>\n<\/ul>\n<ul>\n<li>Vodacom has to provide WirelessG with a data pricing equal to Vodacom\u2019s best wholesale data price \u2013 <em>WirelessG said that this is not happening, which has caused damages of R20.5 million and counting<\/em><\/li>\n<\/ul>\n<p>The matter is set to be heard in court next month, but both parties said that they would prefer a negotiated settlement.<\/p>\n<p>The case poses risks to both sides and, according to industry experts, the two companies may be well advised to reach a settlement rather than to spar in court.<\/p>\n<h3 class=\"my-4\">Vodacom and WirelessG should reach a settlement: Goldstuck<\/h3>\n<div id=\"attachment_2835\" style=\"width: 610px\" class=\"wp-caption aligncenter\"><a  data-lightbox=\"post-image\" href=\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2012\/01\/Arthur-Goldstuck.jpg\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-2835\" class=\"size-full wp-image-2835\" title=\"Arthur Goldstuck\" src=\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2012\/01\/Arthur-Goldstuck.jpg\" alt=\"Arthur Goldstuck\" width=\"600\" height=\"400\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2012\/01\/Arthur-Goldstuck.jpg 600w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2012\/01\/Arthur-Goldstuck-300x200.jpg 300w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><\/a><p id=\"caption-attachment-2835\" class=\"wp-caption-text\">Arthur Goldstuck<\/p><\/div>\n<p><a title=\"World Wide Worx\" href=\"http:\/\/businesstech.co.za\/forum\/showthread.php\/1911-World-Wide-Worx\">World Wide Worx<\/a> MD, <a title=\"Arthur Goldstuck\" href=\"http:\/\/businesstech.co.za\/forum\/showthread.php\/1912-Arthur-Goldstuck\">Arthur Goldstuck<\/a> said that it is in both parties\u2019 interests to reach a settlement.<\/p>\n<p>\u201cWirelessG is a strategic asset for Vodacom, but one that it hasn&#8217;t exploited. On the other hand, the Vodacom footprint is a key element in WirelessG&#8217;s roadmap, so it wouldn&#8217;t want to harm the relationship irrevocably,\u201d said Goldstuck.<\/p>\n<p>\u201cIt appears that Vodacom did take its eye off the Wi-Fi ball for some time, but it is surprising that they wouldn&#8217;t want to sit down and thrash out a mutually agreeable solution.\u201d<\/p>\n<p>Goldstuck added that the terms of the initial contract are surprising. \u201cGiven that wireless hotspot services have a different business rationale than Wi-Fi offload, it may not be ideal to have both in the exclusive hands of one company,\u201d said Goldstuck.<\/p>\n<p>\u201cBoth parties must acknowledge that the market has evolved to a point where they must rethink the approach, without harming WirelessG&#8217;s business interests.\u201d<\/p>\n<h3 class=\"my-4\">Vodacom picks its battles: Neilson<\/h3>\n<div id=\"attachment_30138\" style=\"width: 610px\" class=\"wp-caption aligncenter\"><a  data-lightbox=\"post-image\" href=\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2013\/01\/Brian-Neilson.jpg\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-30138\" class=\"size-full wp-image-30138\" title=\"Brian Neilson\" src=\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2013\/01\/Brian-Neilson.jpg\" alt=\"Brian Neilson\" width=\"600\" height=\"400\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2013\/01\/Brian-Neilson.jpg 600w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2013\/01\/Brian-Neilson-300x200.jpg 300w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><\/a><p id=\"caption-attachment-30138\" class=\"wp-caption-text\">Brian Neilson<\/p><\/div>\n<p><a title=\"BMI-T\" href=\"http:\/\/businesstech.co.za\/forum\/showthread.php\/6915-BMI-TechKnowledge\">BMI-T<\/a> director, <a title=\"Brian Neilson\" href=\"http:\/\/businesstech.co.za\/forum\/showthread.php\/6916-Brian-Neilson\">Brian Neilson<\/a> said that Vodacom picks its battles, and \u201cclearly this one is worth picking, as the stakes are so high in light of the global trend towards Wi-Fi offloading\u201d.<\/p>\n<p>Neilson explained that traffic offloading to Wi-Fi networks will include VoIP traffic which will be a partial revenue substitute for traditional voice calling.<\/p>\n<p>\u201cEven if this is not considered, the mobile IP data market alone is already worth close to R5 billion a year for Vodacom alone and this could double in future,\u201d said Nielsen.<\/p>\n<p>\u201cIf 20% of this is attributed to offloading to Wi-Fi networks, assuming it can be tariffed similarly, that could be worth R2 billion in about 6 years\u2019 time.\u201d<\/p>\n<p>Neilson said that buying out the other shareholders of WirelessG may be an option to consider for Vodacom \u2013 depending on the financial trade-offs involved.<\/p>\n<p>\u201cThey might wait out the court battle to see what the outcome is before reaching such a decision, or reach a settlement at the last minute before final judgement is handed down,\u201d said Neilson.<\/p>\n<h3 class=\"my-4\">Vodacom versus WirelessG not a big deal: Schussler<\/h3>\n<div id=\"attachment_30122\" style=\"width: 610px\" class=\"wp-caption aligncenter\"><a  data-lightbox=\"post-image\" href=\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2013\/01\/Mike-Schussler.jpg\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-30122\" class=\"size-full wp-image-30122\" title=\"Mike Schussler\" src=\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2013\/01\/Mike-Schussler.jpg\" alt=\"Mike Schussler\" width=\"600\" height=\"400\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2013\/01\/Mike-Schussler.jpg 600w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2013\/01\/Mike-Schussler-300x200.jpg 300w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><\/a><p id=\"caption-attachment-30122\" class=\"wp-caption-text\">Mike Schussler<\/p><\/div>\n<p>Well-known economist, <a title=\"Mike Schussler\" href=\"http:\/\/businesstech.co.za\/forum\/showthread.php\/4843-Mike-Schussler\">Mike Schussler<\/a> said that, while he does not generally deal with firm data, he suspects that this is a small fight for Vodacom and a big fight for WirelessG.<\/p>\n<p>\u201cI think Vodacom can keep a court battle going for quite some time,\u201d said Schussler. \u201cWirelessG could keep things going too but not as long as Vodacom.\u201d<\/p>\n<p>Schussler thinks that Vodacom would probably just pay a fee to get out of an exclusive deal that now no longer seems to suit them.<\/p>\n<p>\u201cThe economy will not flinch \u2013 I promise \u2013 as a result of this fight,\u201d Schussler quipped.<\/p>\n<h3 class=\"my-4\">More Vodacom and WirelessG articles<\/h3>\n<p><a title=\"Vodacom in the dock over Wi-Fi contract\" href=\"http:\/\/businesstech.co.za\/news\/mobile\/30051\/vodacom-in-the-dock-over-wi-fi-contract\/\"><strong>Vodacom in the dock over Wi-Fi contract<\/strong><\/a><\/p>\n<p><a title=\"Vodacom investments under the spotlight\" href=\"http:\/\/mybroadband.co.za\/news\/business\/65936-vodacom-investments-under-the-spotlight.html\"><strong>Vodacom investments under the spotlight<\/strong><\/a><\/p>\n<p><a title=\"\u201cVodacom killed my business\u201d\" href=\"http:\/\/mybroadband.co.za\/news\/business\/64096-vodacom-killed-my-business.html\"><strong>\u201cVodacom killed my business\u201d<\/strong><\/a><\/p>\n<p><a title=\"Vodacom\u2019s The Grid shut down date\" href=\"http:\/\/mybroadband.co.za\/news\/cellular\/64118-vodacom-the-grid-shut-down-date.html\"><strong>Vodacom\u2019s The Grid shut down date<\/strong><\/a><\/p>\n<p><a title=\"Stortech head steps down\" href=\"http:\/\/mybroadband.co.za\/news\/hosting-storage\/64028-stortech-head-steps-down.html\"><strong>Stortech head steps down<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The legal battle between Vodacom and WirelessG highlights the need for good partnerships and making sure agreements are done properly<\/p>\n","protected":false},"author":2,"featured_media":14738,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[34],"tags":[843,2094,26,4109,27,2477],"class_list":["post-30118","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mobile","tag-arthur-goldstuck","tag-brian-neilson","tag-headline","tag-mike-schussler","tag-vodacom","tag-wirelessg"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/30118","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=30118"}],"version-history":[{"count":13,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/30118\/revisions"}],"predecessor-version":[{"id":30189,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/30118\/revisions\/30189"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/14738"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=30118"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=30118"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=30118"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}