Wireless Business Solutions (WBS), which owns broadband company iBurst, owes the Independent Communications Authority of South Africa (Icasa) a “substantial” amount of money and its attitude towards settling its dues “palpably demonstrates a recalcitrant operator” that “refuses to meet its statutory dues”.

These are the words of Icasa chairman Stephen Mncube contained in one of a series of heated letters he exchanged in recent months with Thami Mtshali, the CEO of WBS. The letters are attached to court papers filed by Icasa at the high court in Johannesburg in support of its successful application for a search and seizure warrant against the broadband operator.

The authority last Wednesday raided six WBS facilities, seizing communications equipment, which led to extensive downtime for users of iBurst’s network and those using the network of sister company Broadlink. On Friday, however, WBS won an urgent interdict against Icasa, in terms of which the authority had to return all the seized equipment within hours of the ruling being handed down.

Correspondence between WBS and Icasa, some of which dates back to 2010, reveals a deteriorating relationship between the two parties, with WBS contesting the authority’s calculations for spectrum licence fees and the authority accusing WBS of “trivialising” the scale of its debt.

In a letter from Mtshali to Mncube, dated 27 February 2012, Mtshali disputed Icasa’s calculation of R28,8m in fees for the use of spectrum in the 5,9GHz, 10,5GHz, 15GHz and 26GHz radio frequency spectrum bands and said that by its calculations it owed the authority just R8,5m instead. One of the considerations in coming to this figure, according to WBS, was the rural infrastructure it had rolled out in the Sisonke District Municipality and in Hammanskraal.

WBS went on to call for a 30% discount to its proposed fee on account of this rural roll-out and added it had and always would “support and work together” with Icasa “to ensure that we redress legacy challenges of our country’s infrastructure roll-out, specifically in the rural and underserved areas. It is for these reasons that we humbly request to be enabled by the authority to deliver on this task for national impact.”

In another letter, dated 2 August 2012, Mtshali called on Icasa to expedite the process of assigning it alternative spectrum in the 2,6GHz band after the authority opted to migrate WBS away from the portion of that spectrum that it already held and granting it a licence for the revised spectrum allocation.

Mtshali then proposed that Icasa offset the migration costs against what WBS owed the authority. WBS calculated the cost of migrating its spectrum at R72,5m “plus interest at a rate of 2% plus prime” and offered to pay Icasa R1m “as a token of our commitment to the process” of setting its outstanding fees balance.

Mncube responded to WBS in a letter on 24 January 2013, saying that at no point had it agreed to cover migration costs incurred by WBS. “[Icasa] dares WBS to provide proof of such a commitment,” he wrote, adding that the company was trivialising the matter of outstanding spectrum licence fees.

Icasa reckons WBS now owes it nearly R60m in unpaid licence fees. “It is vitally important that the licensee is warned and forearmed that it is in breach of paying taxes that are due to the state,” Mcnube wrote, rejecting the R1m “payment arrangement” suggested by Mtshali. — (c) 2013 NewsCentral Media

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