Blue Label Telecoms will take legal action to recover an unspecified amount of damages it says it has suffered after losing an exclusive contract with Telkom’s failed Nigerian operation, Multi-Links.

Africa Prepaid Services (APS) Nigeria, a company effectively owned 37,7% by the JSE-listed Blue Label Telecoms, signed a 10-year contract with Telkom’s Multi-Links in 2008 for the exclusive distribution of its products to the Nigerian market.

Telkom has been desperately trying to renegotiate the contract with APS for some time and acting group CEO Jeffrey Hedberg had warned that if the group was not successful in doing so, Multi-Links would not survive.

In a statement late on Friday afternoon, Blue Label said that Multi-Links “unlawfully” cancelled the contract it signed with APS.

Telkom announced at its interim results presentation last week that it had decided to exit the wireless CDMA (code division multiple access) business in Nigeria after years of heavy losses at Multi-Links.

Though Blue Label has accepted the termination of the agreement, it says it intends “instituting proceedings for the recovery of the damages it has suffered and will continue to suffer” from the cancellation of the contract.

Blue Label also has distribution agreements with other operators in Nigeria, including Zain, Globacom, Etisalat and Starcomms. — Staff reporter, TechCentral