The Communications Workers Union (CWU) is out for blood, after it lodged an urgent prevention application over the sale of Vodacom to Vodafone.
Minutes before Vodacom announced all conditions of the merger had finally been met, the CWU lodged an urgent application in the Pretoria High Court to have the process halted.
The union has been vocal about its opposition to the merger and the interdict is no surprise to most industry watchers.
CWU's secretary general, Gallant Roberts, says: “Telkom and all others involved in this transaction have shown gross undermining of our organisation and the public in general, in the way that this matter was handled.”
He says the union should have been, but never was, properly consulted on the process to have Vodacom freed from Telkom. The union is fuming over the lack of consultation. “We had no other option but to use the law to force all parties to properly consult CWU, as we have members in both Telkom and Vodacom.”
All three companies have maintained the unions have been consulted on each step of the process. However, the union is adamant it has battled for information from the companies since the start of the process.
Roberts says the union would never have supported the sale of Vodacom to Vodafone, and a transaction of its nature should never have taken place. “Vodafone is a European company and SA companies should not be in foreign hands.”
Fighting chance
The union's application will be heard tomorrow at the High Court, which will determine whether to grant the interdict against the sale. The CWU has been discussing possible mechanisms of being heard since before January.
Roberts is convinced the organisation has good legal standing, because Vodacom, Vodafone and Telkom have a memorandum of understanding with the Department of Communications, which stipulates the labour unions must be consulted throughout the process.
Telkom says it will fight the application, and the fixed-line company will likely present those arguments at the High Court hearings tomorrow.
Telkom, Vodacom and the CWU have had a long embattled history, with Telkom fighting the union on wage issues and Vodacom battling it over its black empowerment transaction from last year.
Ready to roll
Vodacom and Telkom would have hoped to avoid this kind of hurdle, specifically since all the regulatory approvals have been made and all other recommended conditions have been met, albeit two weeks off schedule.
Vodacom has pushed back the listing to 18 May. While Vodacom's JSE debut will be roughly two weeks late, the companies are keen to part ways and begin making their own African imprint as independent telecoms groups.
The companies have been busily signing deals and building opportunities that can only be carried out if they are separated. Telkom's latest is a deal with AT&T that will see it competing in the African space, and Vodacom has plans to aggressively take on the same market.
The current contractual agreement between Vodacom and Telkom means neither can effectively compete in Africa while they are joined. Should the High Court application be granted in favour of the union, plans for Telkom to have fully unbundled Vodacom by 18 May will be scuppered.
Despite the trouble, Vodacom still plans to release its maiden results for the year ended 31 March, the day after it expects to list.
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