Mobile application service provider MCATGen Sdn Bhd is launching a libel suit against telco giant Celcom (Malaysia) Berhad for damages amounting to RM1.6 billion relating to a contract for mobile-commerce services.

MCATGen executive director Ungku Safian Ungku Abdullah ( photo ) told a press conference today the company had no other recourse but to bring Celcom to court to clear its name. He said a writ of summons would be filed at the Kuala Lumpur High Court tomorrow.

On Oct 15, MCATGen launched its mobile prepaid service, which it said utilised Celcom's network. Several advertisements appeared on local newspapers the same day.

However, two days later, Celcom issued a statement denying any relationship or contract with MCATGen, alleging further that the former had utilised Celcom's trademark, logo and intellectual property without prior written consent.

Ungku Suffian denied this today, saying there was proof to the contrary.

He said a MCATGen's letter of demand issued to Celcom on Nov 11 showed that the two parties have been in discussions since December 2003.

Several consignments of SIM cards were also sent to MCATGen between December 2004 to May this year.

'Very nonchalant'

Ungku Suffian showed reporters copies of invoices allegedly from Celcom that were billed to MCATGen.

He claimed that Celcom had tarnished the image of MCATGen by insinuating that it was running a 'dubious business' by denying the existence of an agreement between the two parties.

He said as a result, the firm's business partners and master distributors for its 'starter packs', priced at RM168 each, lost faith in the company.

Ungku Suffian said that attempts had been made to resolve the matter amicably with Celcom.

"But Celcom gave a very nonchalant response. We waited up to 6pm yesterday in hope that they would be willing to resolve the matter," he said, adding that Celcom's denial of the contract "perplexes us in totality".

The MCATGen starter pack allows users to conduct mobile-commerce and download related content.