Home / Mobile Operators / Maxis / Maxis Terminates Salamfone’s contract due to breach of the agreement [Insider]

Maxis Terminates Salamfone’s contract due to breach of the agreement [Insider]

It was reported on MalaysianWireless yesterday that Salamfone, a Mobile Virtual Network Operator (MVNO), shut down its services yesterday. No immediate reasons were given for the sudden termination of service.

MalaysianWireless today learned that Maxis has terminated its contract with the MVNO because Salamfone has failed to meet its sales target.

It is believed that the agreement between Maxis & Salamfone includes sales target that Salamfone has to meet every year, failing to do so, Salamfone will have to settle remaining sales target, supposedly by cash.

According to a source who wants to be anonymous, in the first year of operation, Salamfone was supposed to meet a sales target of RM18 million, however the number was later reduced to more than half after both parties agreed. For last year, Salamfone was supposed to meet a sales target between RM4million-RM5million, however it failed to do so.

The source may be wrong, but Salamfone might need to settle between RM2million-RM3million with Maxis to resume its mobile service. For not settling this penalty, Maxis sent a “termination letter” to Salamfone in June.

The source said that Salamfone has tried to negotiate with Maxis to settle the dispute for the past few months, however both parties failed to reach an agreement.

MalaysianWireless investigated further and found out that Salamfone and Maxis were called to the SKMM(Malaysian Communications And Multimedia Commission) office last Saturday. It is learned that SKMM has instructed both parties to settle the dispute or SKMM will interfere and take the necessary action.

Salamfone has since advised its customers to port to a different mobile service provider.

In response to questions sent by MalaysianWireless, Maxis provided the following official statement:

Maxis Berhad (Maxis) wishes to inform that its subsidiary, Maxis Broadband Sdn Bhd (Maxis Broadband) has terminated its agreement with its MVNO, Salamfone Sdn Bhd (SF), due to material breach of the agreement.  This has resulted in the termination of telecommunication services by Maxis Broadband to SF, which consequently affects the services provided by SF to its customers. We regret this unfortunate incident and the consequences that SF’s customers have had to bear as a result of this.

Maxis has tried its level best to resolve the commercial dispute with Salamfone but parties have not reached a resolution.

Although it is SF’s responsibility to ensure service and network coverage to its customers, Maxis, as a gesture of goodwill and on its own initiative, will be making available free Hotlink SIM packs to customers whose service has been affected as at 26 July 2013 so that their communication needs can be met. SF customers can walk into any Maxis centre for these Hotlink SIM packs. MNP (Mobile Number Portability) is also available to any SF customer to their network of choice.

Salamfone Sdn Bhd is a subsidiary of Kuwait’s Reach Telecom. It is believed that it currently has some 10,000-30,000 prepaid customers.

About Kugan

Kugan is the founder of MalaysianWireless. He has been observing the mobile industry since 2003. Connect with him on Twitter: @scamboy