Vodacom cuts off iBurst for unpaid bills

Mergers, Acquisitions and Financial Results

Vodacom has terminated an SMS agreement with iBurst owner WBS, and cut off its SMS interconnect, after WBS failed to pay its interconnect bill. WBS, however, said that there was no approved agreement in place.

WBS (iBurst) and Vodacom reached an SMS interconnect agreement in July 2013 related to bulk (aka commercial) SMS termination. Vodacom said that the agreed rate for bulk SMS termination was 11 cents per SMS.

WBS started to send commercial SMSes to Vodacom subscribers. However, according to well-placed sources, WBS did not pay any interconnect invoices.

After Vodacom failed to get WBS to pay their interconnect bills, it terminated the SMS agreement and decided to cut WBS’s SMS interconnect.

WBS lodged an urgent high court application to try to stop Vodacom from cutting off the SMS interconnect, but failed in its legal challenge.

“An urgent application was brought by WBS on Thursday last week in relation to SMS interconnect and the blocking of services. The application was heard and subsequently dismissed on Friday,” Vodacom spokesperson Richard Boorman confirmed.

WBS/iBurst CEO Thami Mtshali confirmed that Vodacom has cut off its SMS interconnect, but said that they will continue to fight this action.

Mtshali explained that the regulator Icasa has not approved the Vodacom-WBS SMS agreement, and that the regulator should step in the resolve the problem.

Mtshali said that they are currently working with MTN to ensure that a similar issue does not arise.