Broadband17.01.2013

Vodacom must give you Wi-Fi with 3G: WirelessG

WirelessG has filed court papers saying that it lost R174 million in income because Vodacom is not complying with its shareholder agreement which should see all Vodacom data products being sold with Wi-Fi.

This claim forms part of a larger legal case filed by WirelessG and other shareholders against Vodacom, arguing that Vodacom has not honoured its shareholding agreement.

According to the document a shareholder agreement (Irrevocable Offer) between Vodacom and WirelessG contained the following clause:

“Vodacom will bundle WirelessG Wi-Fi services with Vodacom data products. WirelessG will have the right to co-brand in such offerings.”

This clause, said WirelessG CEO Carel van der Merwe, means that Vodacom is obliged to offer WirelessG’s Wi-Fi as an integral part of its data bundles. This has not happened.

WirelessG said that the damages suffered from Vodacom’s failure to bundle their products from 2007 to 2012 amounts to R174 million.

WirelessG added that these losses are set to continue, unless Vodacom starts to bundle their services.

Carel van der Merwe

“We are still hoping to reach a negotiated settlement on how and when Vodacom will bundle our Wi-Fi with their products – [the alternative being] that they be ordered to do so. At this moment we estimate our damages at about R7 million per month,” said van der Merwe.

Van der Merwe said that he would like to see Vodacom offer co-branded 3G/WiFi bundled products – sold collectively as one offering – which are distributed through all 780 Vodacom retail distribution channels.

The WirelessG CEO further highlighted that Wi-Fi bundling can benefit consumers. “Available technology provides for a data offloading model that makes seamless switching from 3G to Wi-Fi without any customer intervention,” said van der Merwe.

Vodacom confirmed that it has received an urgent application from WirelessG in December, but has been advised not to comment ahead of the court case.

The case is set to be heard in February 2013, WirelessG said.