NetOne, Zimbabwe`s state owned mobile operator has won a $290 million lawsuit case against Secure Dynamix Zimbabwe PVT (LTD), a company owned by South African based Zimbabwean Mr Tafadzwa Muguti who under unclear circumstances has dropped the lawsuit against Netone.
According to court documents presented to TechnoMag, Secure Dynamix Zimbabwe had filed a lawsuit with 4 respondents namely the State procurement Board, NetOne Cellular PVT LTD, Huawei Technologies CO. LTD and the Anti Corruption Commission of Zimbabwe over allegations of awarding a tender to Huawei without following laid out procedures.
An impeccable source has told TechnoMag that Tafadzwa Muguti dropped the case due to lack of strong basis and flawed legal process as he pursued the case with some initial legal glitches.
Initially after filing the suit, it is alleged that Tafadzwa Muguti appeared in court without any legal counsel representing and when the hearing was announced, he did not turn up on the 15th January for court and a default judgement was issued in favour of Netone.
Secure Dynamix Zimbabwe PVT (LTD then later appealed for rescission, causing the case to be set for the 19th of March and surprisingly Secure Dynamix subsequently withdrew the court case and both parties are taking full responsibility of the court costs.
According to SecureDynamix, they argued that NetOne is a state-owned enterprise and is expected to adhere to Zimbabwe’s procurement act, it is bound to undergo tender processes whenever carrying out deals such as cell-tower upgrades.
Huawei however won the $200 million contract upgrade without undergoing a tender process.
Secure Dynamix was also interested in the same tender and found it unfair for an international company to win the tender over local players, a move they said was in violation with the current indigenisation act.
Mr Reward Kangai the Managing Director of Netone responded that it did not make any business sense to award the contract to a new player only to upgrade a system which Huawei had initially implemented, Huawei was well placed for the contract of upgrading its own equipment for their Network growth.
“This request would then imply that Netone would need to throw away their current infrastructure only to pave way for a new player who would then commission and administer own equipment, beside that fact, the law limits Netone to only 3 contactors, which they already have two of those aboard, a move that would stifle potential future growth”, an insider disclosed.
When contacted for comment, Mr Reward Kangai said the “lawsuit had scuttled their national expansion drive which should have taken course and forced the loan downwardsfrom the original $290 million”, but he was glad that they now have a green light to start expanding their network and activating new services for the subscribers.”
Mr Kangai noted that” with the initial loan offer of $290 million, Netone would have been poised for a tremendous growth to sustain their full budget on new high powered technological base stations plus expansion strategy while the reduced figure will force them to downsize on their budget.
The expansion will also allow Netone to shift to newer technologies that will unpack more internet based Value Added Services and VoIP opportunities hinted Mr Kangai.
Netone has been operating without any investment funds for years but by merely being self sustainable as it withstands competition in a hotly contested environment where its competitors have been enjoying large investments for growth.
To date Netone has over 2 million subscribers, a huge number for a state owned operator running on self sustainable means and zero investments.
Econet Wireless Zimbabwe now has 8.5 million subscribers, while Telecel jumped by a meager 100k subscribers from 2.43 million to 2.54 million. The state owned operator NetOne in the last quarter, moved by 352 000 subscribers from 2.1 million to 2.45million subscribers.