It appears that Vodacom is trumpeting its R3 billion profit to its shareholders while at the same time wiping the bloody nose it received in its abortive attempt to gain access to the lucrative Nigerian market.
This little setback cost Vodacom in the region of R53 million, but the damage it has done to the company`s image is far costlier.
Although Vodacom would like to be seen as the 'good guy` that stepped in and offered to provide the capital to allow Econet Wireless Nigeria (EWN) to set itself up as the rival to MTN Nigeria, it has come off looking more like a bully.
The cellular operator rode roughshod over the claims made by Econet Wireless International (EWI), which said it had pre-emptive rights to purchase the shares in EWN that were instead offered to Vodacom.
Despite legal action taken by EWI, Vodacom went ahead and signed a management contract - it was unable to purchase the shares due to the legal actions - with EWN which superseded the one initially held by EWI.
It then rebranded EWN`s product range and set it up to trade as Vodacom Nigeria, even though EWI had yet another legal action under way regarding the cancellation of its management contract, which it claimed had been done illegally.
Then suddenly, just two months into what was supposed to be a five-year contract with EWN, Vodacom decided to pull out. It cited breach of trust due to brokerage fees that were paid by EWN, despite the South African organisation requesting that these payments were not made, as it was worried that these may have been illegal.
However, when one takes into consideration the fact that EWI`s CEO, Strive Masiyiwa, was quoted as saying that - because of his company`s court actions - Vodacom`s five-year contract may turn out to be "a five-day deal instead", perhaps there is more to it than simply breach of trust.
Perhaps Vodacom was hoping that if it went ahead with the rebranding, it could convince the courts that it was in the right, or perhaps it hoped that by doing this, it would scare EWI off.
But EWI turned out to be more tenacious than it thought and what should have been a route into the Nigerian market, which is dominated by rival MTN, has instead turned into a costly and damaging exercise.
The company`s deputy CEO, Andrew Mthembu - who was the driving force behind the EWN deal - has been forced to fall on his sword and quit the company, even though he had been widely tipped to succeed current CEO Alan Knott-Craig.
The company`s deputy CEO, Andrew Mthembu, has been forced to fall on his sword and quit the company, even though he had been widely tipped to succeed current CEO Alan Knott-Craig.
Rodney Weidemann, telecoms editor, ITWeb
The Nigerian escapade could also end up costing Vodacom a whole lot more than the loss of senior staff (not to mention the bad publicity it has received) as the R53 million it has so far cost the company is small potatoes compared to what it may have to fork out if EWI wins another case it has opened against the cellular operator.
EWI has an application currently before the Nigerian High Court where it is suing Vodacom for inducement of breach of contract and seeking damages as result of this.
EWI has worked out its losses incurred following the cancellation of its management contract to be in the region of R1.8 billion, which is more than enough to wake the cat, as the saying goes.
So although Knott-Craig appeared optimistic when announcing the company`s annual results - even going so far as to say he has not yet given up on entering the Nigerian market - one imagines he is not feeling quite as positive on the inside.
More to the point, one imagines his organisation will be a whole lot more careful when taking decisions to move into foreign markets and one seriously doubts Vodacom will try to bully its way into anything in the near future.
Certainly not now that EWI has shown that the Davids of this world can still beat the Goliaths.
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