Vodacom tripled our broadband prices: WirelessG
WirelessG said in a court document that Vodacom changed their wholesale data price from 18.24c per MB to 50c per MB without any consent or consultation. This was done despite a signed agreement which promised them the lower rate, argues WirelessG.
This complaint forms part of an urgent court application, filed by WirelessG and six other applicants, arguing that Vodacom has not complied with its shareholder agreement.
According to the document, a shareholder agreement (Irrevocable Offer) between Vodacom and WirelessG contained the following clause:
“Vodacom will extend APN data access to WirelessG at a rate equal to Vodacom’s best wholesale data price as offered to its retailers.”
WirelessG argues that the intention was for Vodacom to provide WirelessG with a preferential rate (best price in the market irrespective of volume) to enable the company to offer its customers competitive prices.
WirelessG said that Vodacom charged them a rate of 18.24c per MB (19c per MB with a 4% agreed discount) from April 2007 to April 2009.
However, this changed after Vodacom changed its business rules on corporate APNs in April 2009. This change, WirelessG argues, was to “prohibit any wholesaler to on-sell the corporate APN to its end customers”.
According to the document the following price changes occurred between April 2007 and now:
- From April 2007 to April 2009 Vodacom charged WirelessG 18.24c per MB (19c per MB with a 4% agreed discount)
- Vodacom changed the price for a MB of data to Wireless G from 18.4c per MB to 50c per MB – a 274% increase – after an APN rule change. “[This was done] without mutual consent, consultation with WirlessG, any impact analysis or even reasonable notification,” said WirelessG.
- The price was reduced to 39c per MB after a long battle, which WirelessG said is still not competitive.
- The price was reduced to 31c per MB from September 2011 (to now) after WirelessG launched a dispute.
WirelessG highlighted that Vodacom has reduced its retail price to 14c per MB (Ex VAT), while WirelessG was forced to increase its retail prices because of the wholesale rates increase.
The company said that the total damages suffered by WirelessG as a result of Vodacom’s failure to extend APN data access at a rate equal to Vodacom’s best wholesale rate totals R20.5 million.
“Vodacom’s persistent failure to provide WirelessG with the best wholesale price will undoubtedly [cause] further substantial damages in future,” said WirelessG.
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.
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