Telkom is claiming more than R2.6 billion from an American software company after a dispute arose on the nature of the contract between the companies.
Telcordia, the American company that in 1999 won a contract to supply a service activation and assurance software system to Telkom, has for its part lodged a claim for damages in the region of R1 billion.
The information was made public in the Telkom financial statements released yesterday in a note on contingent liabilities.
"A dispute for services rendered from a supplier has not been recognised as it is not probable that an outflow of resources will be required," the note 21 to the financial statements reads.
Telkom executives have confirmed that the note refers to the Telcordia deal but were not available for comment.
Telkom heavily punted the iCare/FlowThru solution in 1999, saying it would dramatically improve its response time to customers through the software as it geared up for competition, now due in 2002.
In an earlier statement, Telkom said the deal had been cancelled due to non-delivery. "Telkom terminated this contract earlier this year as Telkom was not satisfied with the services and products supplied by Telcordia in the sense that these did not meet Telkom`s business requirements," the company said.
Local company Safika Technologies was subcontracted to implement the system, while several hundred Telkom employees are estimated to have been involved in the development and implementation. Safika has said the cancellation of the deal will not affect it, although it is believed revenue due to the company could have amounted to just under R100 million.
It is not clear what constitutes the damage claims by Telkom and Telcordia, but it is believed that Telcordia is claiming breach of contract while Telkom is claiming the damages it suffered due to the abandonment of the system. Telkom is still using its prior workflow systems, which were considered inadequate in 1999.
Telcordia could not be reached for comment.
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