Telkom will have to pay Telcordia $82 million over a breach of contract that happened nine years ago.
The fixed-line operator will pay out $30 million because it breached a contract with the US-based company, as well as another $52 million in damages, which in total equates to just over R610 million.
Telkom says the dispute arose in 2001 when Telkom cancelled a contract with Telcordia. The US-based company was meant to supply an integrated end-to-end customer assurance and activation system.
After Telkom cancelled the deal, Telcordia put in a claim for $178 million and interest. Several arbitration hearings occurred in 2008 and 2009, and the arbitrator decided in favour of Telcordia on 11 June.
Ouma Rasethaba, Telkom's chief of corporate governance, says the claim was reduced from $178 million to $128 million and finally to $30 million. “The nine-year fight was worth it.”
Telkom could face further payouts as the question as to who is liable for costs has yet to be settled. It is expected that costs will be decided in August. In its latest financial results, Telkom has set aside R565 million to cover the liability.
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