Reunert has instituted legal proceedings against John Holdsworth and AppChat for breaching restraint of trade agreements. Holdsworth does not believe that they are in breach of any confidentiality or restraint undertakings and will be opposing the matter.
Reunert said in a SENS announcement that it seeks to enforce contractual restraint of trade and confidentiality undertakings given by Holdsworth in favour of Reunert. This followed Reunert’s acquisition of the ECN Telecommunications business in June last year.
ECN Telecommunications now operates as Nashua ECN, a division of Reunert Limited.
Holdsworth confirmed that a team of senior technical staff have resigned from Nashua ECN and will be joining AppChat.
“The matter is before the courts so I cannot comment on the legal specifics at this point in time, however we do not believe that we are in breach of any confidentiality or restraint undertakings and will be opposing the matter,” Holdsworth told MyBroadband.
“It is our view that Nashua ECN operates in the fixed line market, whilst AppChat intends to operate in the mobile market. It is widely accepted by regulators globally that the relevant markets for mobile and fixed telecommunications are separate and different. This distinction is recognized globally and is consistent with ICASA’s market definitions,” said Holdsworth.
Committed to cutting mobile communications costs
Holdsworth explained that AppChat has been set up with the specific purpose of passing on the benefit of reduced wholesale costs and lower interconnect rates to consumers.
“We want to make sure that the difference between R1.25 and R0.40 lands in the wallets of mobile subscribers and not the coffers of incumbent mobile operators. We believe that competition is good for the market and will benefit all parties including Reunert’s mobile division Nashua Mobile,” said Holdsworth.
“Ultimately mobile prices will fall, mobile traffic will increase, subsidies will be cut to the bone and mobile dealer commissions will be reduced. New entrants will acquire market share and the large incumbent operators will have to up their game in order to compete.”
“This is very healthy and the big winners will be South African consumers and businesses. They will experience a mobile market with lower prices, increased competition and leaner incumbent mobile operators,” Holdsworth added.
AppChat intends to provide consumers with the lowest cost and highest quality voice minutes in SA.
“We will be one of the first mobile operators in SA to position off-net rates substantially below the incumbent operator’s on-net rates,” explained Holdsworth.
“The rapid rollout of IP based networks, the explosive growth of data based services and devices, ICASA’s plan to implement wholesale open access and lower interconnect rates will see the biggest change in the mobile market for 15 years,” concluded Holdsworth.