Treasury defends cellphone deal with Vodacom

The national Treasury has defended its contract with Vodacom to provide cellphone packages to 20 government departments, after the Competition Commission said it was investigating Vodacom for uncompetitive behaviour.

Vodacom won a five-year tender to provide the highest-spending government department with contracts from September last year until 2020. Treasury said the contract was to save money rather than have individuals or individual departments negotiating mobile contracts.

The Commission said on Wednesday it had "reasonable grounds to suspect that the exclusive contract ... was in contravention of the Competition Act".

But Treasury hit back saying "the procurement process to appoint a service provider took approximately 18 months, and included various consultations with key stakeholders, being government departments and the mobile network operators themselves".

"The specification was developed by the Treasury and the top 20 government departments with the highest spend. In addition, it was also agreed to by suppliers when the tender was put out."

Vodacom was awarded the contract because it offered the lowest prices, said the Treasury.

"The appointment process followed a proper due diligence and governance process and the matter was also consulted with the Competition Commission," the Treasury said.

Vodacom said it was "surprised" by the investigation and noted the commission had been involved in the 18-month tender process.

Vodacom Group's CEO Shameel Joosub said: "While we are surprised by this investigation, we are committed to fully co-operating with the commission."