Istanbul-based Turkcell has filed a lawsuit in a US court claiming unspecified damages from Africa's largest cellular operator, MTN.
Turkcell alleges in a statement that it was barred from concluding a GSM licence agreement in Iran, which it was awarded in 2004. The company argues that Iran instead entered into a contract with MTN rather than Turkcell.
Iran is MTN's fastest growing unit, increasing revenue by 20% in the year to December, accounting for R11 billion of the company's full-year revenue of R121.9 billion. It has 34.6 million of MTN's 164.5 million subscribers, growing 16.6% in the year, despite more than 100% penetration.
MTN has a 49% stake in Irancell through one of its subsidiaries. Irancell, which has the second GSM licence in Iran, is 51%-owned and controlled by Iran Electronic Development Company.
Dodgy dealings?
The Turkish operator alleges that in 2004/5, MTN improperly paid a South African and Iranian government official to win the licence in 2005.
“Newly-received information by Turkcell indicates that the signing of the licence agreement with MTN instead of our company was a consequence of MTN's actions at that time,” says Turkcell's statement.
The company says it filed the lawsuit today in the US district court for the District of Columbia as “both companies have extensive business dealings” in the US and because of allegations that MTN breached international law.
Turkcell says it is seeking compensation of “such” damages, but did not quantify these. It alleges that it previously conducted settlement discussions with MTN, which MTN terminated this month through a public announcement.
MTN was not immediately available to comment, but the company previously stated that talks between it and Turkcell broke down because of the Turkish company's “extortionate demands for damages and its threat to start a frivolous lawsuit in the US”.
The local operator has set up a committee to investigate the allegations, which will be chaired by jurist Lord Leonard Hoffmann.
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