The head of MTN SA - SA's second-largest cellular network - has been ordered to explain to the North Gauteng High Court why he should not be found guilty of contempt of court and sentenced.
Karel Pienaar, MTN SA MD, has until 17 April to explain to the court why MTN SA stopped allowing bulk SMS provider Telfree to send SMSes over its network, which ITWeb understands it did last week, despite a previous order ruling that it could not do so.
On Friday, justice Margaret Victor handed down a draft interim order directing MTN SA to immediately restore SMS functionality - sending and receiving - to Telfree over its cell network. "It is confirmed that the respondent is already interdicted from disabling, diminishing or restricting in any manner the applicant's access to the short message system (SMS)."
This interdict is in place until the entire matter is resolved, which has yet to happen. MTN was also ordered to pay the costs of the application.
In addition, Victor ordered that Pienaar provide reasons by 17 April as to why "he should not be found guilty of contempt" - and be sentenced accordingly - of a September order, which directed MTN SA to restore SMS functionality to Telfree. Failure to comply with a court order could lead to a party being jailed.
The September order, handed down by justice Hans Fabricius, also ordered that the initial dispute should be set down for hearing oral evidence. It is not clear whether a date has been set for this as yet. However, the order to restore SMS services to Telfree remains in place until the matter is resolved.
No deal
Telfree CEO Walter Betschel says the root of the problem was that MTN and Telfree could not reach an interconnect agreement that would settle the charge to Telfree when it sent SMSes to people who were MTN subscribers.
The Telfree Group is a privately-owned group of companies headquartered in Switzerland, and has positioned itself to penetrate the last growth markets of Africa and other emerging markets.
Telfree has points of presence in SA, Switzerland, Austria and the UK, with a key focus on SA as a platform for the rest of Africa. Telfree is fully licensed by the Independent Communications Authority of SA to provide telecommunications-related services in SA.
The company provides SMS messaging services through direct interconnects with all major operators. Telfree sends and receives SMSes over its own carrier infrastructure.
Betschel says "millions" of SMSes are sent via Telfree to the MTN network on behalf of wireless application service providers (WASPs). He explains that the company had contracts in place with all the operators that allowed it to send SMSes on behalf of other companies at a lower cost.
However, last year, before an agreement could be reached, MTN stopped allowing Telfree to send SMSes via its network, says Betschel. A subsequent court order forced the company to allow it access, which was breached last week, he notes.
Betschel says he hopes to come to some sort of an agreement with Pienaar, which would resolve the matter and take the issue out of court. "If we have to bring in the cannons, we are prepared to do that, but we don't want to."
Circumventing?
MTN had previously threatened to cut Telfree off from sending SMSes via its network unless it became a registered WASP. Betschel says the company does not need to register as a WASP as it is a telecommunications company.
In November 2011, MTN and Vodacom told Neotel and Telfree to register as WASPs as they had been circumventing the preferred channels to send out application-to-person (A2P) messages on behalf of third-parties.
Previously, companies wanting to send commercial PC-generated SMSes had to sign up as WASPs with mobile operators. However, after the Electronic Communications Act came into effect, it became possible for more entities to obtain individual electronic communications network services licences, allowing companies to sign interconnect agreements and send SMSes without becoming WASPs.
The A2P SMS market is worth more than R1 billion a year to the local network operators combined, BulkSMS.com MD Pieter Streicher said at the time.
MTN told Telfree and Neotel they have to remedy the breach and sign bulk WASP SMS agreements. Kevin Jacobson, GM of business indirect sales at MTN SA, said both entities must stop using the so-called grey routes to send SMSes, or face the suspension of SMS services.
Cellular operators require WASPs to belong to WASPA, which would then enable the association to regulate the traffic and crack down on unwanted commercial messages.
Pienaar was not able to respond this morning as he was in meetings and an e-mailed list of questions was apparently not delivered to his e-mail address. MTN's corporate communications department undertook to respond before publication, but failed to do so.
Update:
Post-publication, MTN SA reverted with the following statement:
"MTN can confirm that it has received an interim order granted in favour of Telfree. As this is an interim order, MTN has not had the opportunity to respond to the allegations raised by Telfree and will only be able to do so on the return date, being 17 April 2013. As this matter is before court it is sub judice but MTN is confident that it has taken whatever steps within the parameters of applicable laws. Furthermore, MTN would not to conduct its defence through the media but through the necessary court processes. As a result, MTN will not comment further on this matter." - attributed to Fusi Mokoena, GM of commercial legal.
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