Battle erupts over MTN Traveller

MTN Traveller was launched amid fanfare at Inanda Club in Sandton in November 2010, with Jabu Mabuza, then chairman of Tourism SA, making a keynote speech. The product was originally pitched to MTN by MobiRes in May 2010 and a non-disclosure and confidentiality agreement was subsequently signed between the parties.

The application provided an online booking and payment system for accommodation, car rental and airline tickets and was hailed by MTN as a "South African and world first that is going to change the face of hospitality bookings".

Now, more than two years later, MTN has invited parties to submit proposals for MTN Travel Solution after it has "identified a new business opportunity that will offer mass and emerging markets and smartphone Internet-enabled customers with an e-ticketing solution".

In the proposal, sent out on 18 March, MTN said it is looking for a supplier for the booking and reservation system, which will allow users to reserve and purchase a ticket for transport and accommodation services in South Africa using their cellphones.

Fraser Gregg, managing director of MobiRes, which demonstrated MTN Traveller to journalists and dignitaries at the November 2010 launch, said MTN's current actions "most certainly infringe and contravene the non-disclosure agreement and most certainly infringe on MobiRes's intellectual property".

"We introduced, conceptualised, designed and developed a mobile travel solution and took it to MTN as a possible partner. MTN did not, as per the tender e-mail, identify a new e-ticketing business opportunity," said Gregg.

Lawyers handling the dispute

While MobiRes has appointed lawyers to deal with the matter, "we realise that the huge disparity in the parties' financial resources will prejudice our legal battle to protect our rights", he said.

MTN said it invited bidders as MobiRes was given "ample time" to showcase a commercial product after the MTN Traveller pilot was launched, but it failed to deliver as agreed.

Following the January 2012 launch with an expanded range of travel partners and a more comprehensive marketing strategy, which resulted in several hundred bookings, MTN requested that MTN Traveller be taken offline under the pretext that it would be relaunched within four weeks as a full commercial MTN product aimed at high-end consumers.

In a letter to MTN Traveller service providers, MTN asserted its commitment to, and faith in, the success of the program.

The commercial relaunch did not happen, apparently because of budget constraints at MTN, a claim the company has denied.

Correspondence between the parties over two years shows delays in agreeing on financial terms and conditions and putting final agreements in place.

Fusi Mokoena, general manager: commercial legal at MTN SA, said MTN has not used any of MobiRes's intellectual property in the request for proposals that was issued in March.

"MobiRes was engaged for a period of two years. MobiRes has not delivered any product that we could deem ready-for-market or commercial use.

"Surely MTN cannot be expected to be bogged down in that relationship. MTN believes there are similar solutions in the market and there are other companies in this market. MTN is entitled to invite other suppliers to showcase products that respond to customer needs. MobiRes has been given ample time by MTN to showcase the product after the pilot, and to date MTN has not been afforded an opportunity to even see a demonstration of such a product," Mokoena said.

From correspondence between the parties seen by Business Times, it is clear that MobiRes did not want to provide MTN with demonstrations of MTN Traveller Agent, a separate product aimed at emerging marketplaces, before MTN had signed letters of intent and made some financial commitments concerning both products. In turn, MTN sought detailed cost breakdowns and demonstrations before finalising agreements.

"We had not received commercial agreements from MTN after eight months of ongoing promises. We agreed to expose more of our intellectual property [IP] once a letter of intent at least was supplied by MTN to protect our concept and the related intellectual property. To say they never saw a working pilot is ridiculous as they were actively involved in its activation," Gregg said.

"All existing development specification documents were handed over to MTN in January after it was proposed at a meeting that MTN buy the intellectual property from MobiRes," Gregg said.

Source: Business Times via I-Net Bridge