ZTE parts ways with South African partner amid claims of dodgy Telkom tender

ZTE South Africa CEO Cris Fuentes says the Chinese group is terminating its relationship with local firm ZTE Mzanzi, in which it owns 40 per cent. Fuentes is reported to have said ZTE had tried several times to reach an amicable settlement with ZTE Mzanzi, but has been unsuccessful. ZTE Mzanzi successfully asked a court to stop Telkom from rolling out a ZAR 13 billion (US$1.59 billion) network upgrade that had been awarded to Huawei and Alcatel Lucent.

Telkom recently announced it was looking to replace out-dated DSLAM boxes with newer technology as part of its plan to move to an all-IP network designed to enable fixed-mobile convergence and truly differentiated high-speed broadband.

ZTE Mzanzi believed Telkom’s bidding process was not fair and that its tender was never properly considered, despite complying with all of Telkom’s requirements, including those on empowerment and technical capability.

ZTE said the legal proceedings were instituted without its approval and without the backing of its representative on the board of ZTE Mzanzi. Fuentes said the lack of authorisation from ZTE to proceed with the Telkom litigation has been one of the elements that motivated its decision to sever ties. He said the main reason is a lack of consultation with ZTE in Hong Kong in key decisions.