Nokia Siemens, Voda in court truce

Nokia Siemens Networks and Vodafone have started negotiations over allegations that the telco withdrew $8 million from a bond meant as a contract-based performance bond for Nokia Siemens Networks, cancelling a directions hearing set to go before the Federal Court this morning.

Nokia Siemens Networks had been in charge of Vodafone's core network operations beginning at the end of April in 2010. The contract had been worth hundreds of millions of dollars to Nokia Siemens Networks, but all came undone when Vodafone's network began to buckle under the strain of its customers. In February this year, Vodafone announced a complete overhaul of its network with Chinese network vendor Huawei instead of incumbent vendors Nokia Siemens and Ericsson. The new network is expected to be completed within an 18-month time frame and will cost the company over $1 billion.

The suit, filed by Nokia Siemens Networks last month, alleges that Vodafone withdrew $8 million from a "performance bond" intended for Nokia Siemens. Nokia Siemens is claiming that the bond withdrawal is a breach of Australian Consumer Law.

Nokia Siemens had sought declarations from Vodafone admitting that its alleged withdrawing of the $8 million was deceptive and misleading, and demanded that the telco replace the $8 million before mediation.

The case was set to be heard in a directions hearing today with Justice Alan Robertson in the Federal Court in Sydney, but the hearing was cancelled at the last minute. According to Vodafone, the matter had been adjourned by agreement of the two companies "as we continue discussions to resolve the issue".

Nokia Siemens Networks declined to comment.

As part of an advertising blitz and cut price deals to win back some of the 375,0000 customers Vodafone lost at the height of its network problems, the company has introduced a network guarantee that will allow customers to cancel their contract within 30 days of signing up if they're unhappy with its network coverage.