Telcordia Up for Grabs Again?
Among SAP's carrier customers are Cable and Wireless plc (NYSE: CWP), Deutsche Telekom AG (NYSE: DT), Telecom Italia (TIM) , SK Telecom (Nasdaq: SKM), Telefónica SA (NYSE: TEF), and Vodafone Group plc (NYSE: VOD).
SAP also has a strong list of vendor partners, including Cisco Systems Inc. (Nasdaq: CSCO), Fujitsu Ltd. (Tokyo: 6702; London: FUJ; OTC: FJTSY), Nokia Corp. (NYSE: NOK), and Siemens Communications Group . (See Cisco Speaks Applications.)
But OSS consolidation has left SAP with potentially unstable partnerships. Two of its strongest telecom software partners have been inventory management firm Cramer Systems and billing systems vendor Portal Software. Now these two companies are under new ownership by Amdocs and Oracle respectively. (See Cramer Partners With Alcatel, SAP, Amdocs Snaps Up Cramer, Oracle Acquires Portal, and Portal, SAP Team Up.)
With SAP keen to play a greater role in the telecom sector -- especially in helping carriers manage the operational challenges they face as they move into Web services and media content provision -- it may need to strengthen its hand in terms of in-house capabilities.
Telcordia wins court case
So the marathon legal battle with Telkom SA is over, with South Africa's Supreme Court of Appeal upholding the appeal made by Telcordia against the initial 2003 judgment made in favor of the carrier.
The details of the case are well documented. Basically, back in 2000 Telkom didn't think Telcordia had met with some contractual obligations and cancelled an order for an activation and service assurance system. The OSS company then initiated legal proceedings in 2001, and demanded the $130 million it believed it was due. (See Telkom vs Telcordia: Case Not Closed and Telcordia Leaves Legal Luggage.)
Now Telkom is in a pickle, as it hadn't factored a big payout into its accounts. While the carrier says it doesn't know how much it will be told to pay out, it will be $130 million plus interest, with South African media estimates putting the figure at up to $220 million. The carrier admits it hasn't made any provisions for a payment, and notes, in a prepared statement, that its "legal team is considering the possibility of other avenues which may be open to Telkom."
The Supreme Court ruling has always been seen as the final act in the case, though.
While the court's decision is good news for Telcordia, it won't be gaining financially. As part of last year's acquisition, Telcordia's former parent, Science Applications International Corp. (SAIC) , "retained legal and financial responsibility and control for this matter," and will bank the proceeds.
— Ray Le Maistre, International News Editor, Light Reading
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