NIGERIA TELECOM STRIKE ENDS BRIEFLY, RESUMES

UNCLAS SECTION 01 OF 02 ABUJA 001517 SIPDIS SIPDIS USDOC FOR 3317/ITA/OA/KBURRESS USDOC FOR 3130/USFC/OIO/ANESA/DHARRIS DOL FOR ANN ZOLLNER TREASURY FOR DAN PETERS STATE PASS USTR E.O. 12958: N/A TAGS: ECPS ELAB ECON ETRD EINV PGOV NI SUBJECT: NIGERIA TELECOM STRIKE ENDS BRIEFLY, RESUMES REF: ABUJA 1462 ¶1. Summary. The strike shutting down NITEL ended the evening of June 13, then resumed the afternoon of June 14 as NITEL workers again walked off the job. A new union, the National Association of Telecommunications Employees, termed as inadequate the GON's offer of 1.7 billion naira (about $13.3 million) in overdue salary and allowances. Telephone service, however, seemed to improve throughout the country on June 15. Embassy Abuja and Consulate Lagos's USG-owned satellite communications with Washington remained unaffected. The Nigerian telecom sector's total losses in revenue from the strike already exceed several billion naira. Further labor unrest was on the horizon as employees of the Power Holding Company of Nigeria (PHCN) threatened to strike starting June 30 and cause a nationwide blackout if the GON proceeded with its planned privatization. End summary. ¶2. Confusion reigned within Nigeria's telecommunications sector on June 14 as the strike shutting down state-owned Nigerian Telecommunications (NITEL) ended the evening of June 13, then resumed the afternoon of June 14 as NITEL workers again walked off the job. NITEL employees are striking to demand the payment of back wages and allowances. Breakaway union demands full payment of arrears -------------- -- ¶3. The leadership of the National Union of Post and Telecommunications Employees (NUPTE) and the Senior Staff Association of Utilities, Statutory Corporations, and Government Companies (SSAUSGOC) agreed to end their strike on June 13. However, a faction of the NITEL employees rejected this settlement and formed a new union, the National Association of Telecommunications Employees (NATE), which proclaimed the Government of Nigeria's (GON) offer of 1.7 billion naira (about $13.3 million) inadequate compared to arrears of N4.2 billion ($23.3 million). NATE's leadership contended that many NITEL workers no longer trusted NUPTE and SSAUSGOC to represent their interests and thus formed the new union. Embassy telecom contacts reported that part of the tension within telecom workers' ranks is NITEL's looming privatization. Many NITEL employees are determined to receive all overdue pay and �0A;allowances before the company is sold. The workers fear that debts otherwise owed them will not survive NITEL's privatization. ¶4. NATE President Charles Amankwe told the press June 14 that his union would not accept "half measures" from the government concerning money owed to his members. Amankwe called on NITEL's customers to pay their debts to the company. He said private telecommunications operators (PTOs) owed NITEL significant amounts. Amankwe also claimed that some of these PTOs have never paid any money to NITEL, which "is not how business is done." Labor contacts of the Lagos consulate said June 15 that NATE is controlling the strike, is insisting on a full payment of arrears, and that the stoppage may last longer than several days. Some labor experts said the strike could last an additional two weeks or longer if the government does not resolve the issue of arrears completely. ¶5. Telecom contacts of the Lagos consulate reported June 14 that NITEL's national secretary confirmed the GON released 2 billion naira ($15.6 million) -- sufficient to cover three months' overdue salaries -- as well as 625 million naira ($4.9 million) for overdue furniture allowances for the past year. NITEL is considering releasing a press statement warning all PTOs that they must pay all interconnectivity debts owed to NITEL or be disconnected. For its part, NITEL claimed the GON, state governments, local governments, and PTOs owe NITEL about 89 billion naira ($695 million),at least 70 percent of which is overdue interconnectivity fees from PTOs. ¶6. The sources added that the Ministry of Communications and NITEL's management believe NITEL can be self-sufficient if PTOs and other customers pay their bills on time. Telecom experts, however, are skeptical, citing NITEL's endemic management problems and poor morale as recurring barriers to the company's delivering good service. The analysts said the impact of these strikes clearly had harmed NITEL's ABUJA 00001517 002 OF 002 value. Telephone service improves -------------- ¶7. Service on the MTN cellular network, used by embassy staff, resumed the evening of June 13 when a technical fault was corrected. Many calls could not get through on NITEL or M-Tel lines, while service provided by Globalcom, MTN, and V- Mobile remained erratic. All NITEL lines in Lagos and Abuja had been switched off, but on the afternoon of June 15 (local time),NITEL lines started to work again in Lagos and Abuja -- and service was supposed to resume across the country. The improvement in NITEL service did not result from a resolution to the strike, NITEL officials told the embassy. Embassy Abuja and Consulate Lagos's USG-owned satellite communications (data circuitry) with Washington remained unaffected by the strike. Economic losses mount -------------- ¶8. Cellular provider Starcomms told the Lagos consulate on June 15 that losses in revenue from the strike cost the company more than 350 million naira ($2.7 million). Other PTOs are turning to alternative satellite backup links, but the strike continued to cost them money. Global System for Mobile Communications operators said the Nigerian telecom sector's total revenue losses from the strike exceeded several billion naira. Power Holding Company workers warn of pending strike -------------- -------------- ¶9. Further labor unrest could be on the horizon as employees of the Power Holding Company of Nigeria (PHCN) threatened to strike starting June 30 and cause a nationwide blackout if the GON proceeds with its planned privatization of the company. Joe Ajaero, general secretary of the National Union of Electricity Employees, told the media on June 12 that the government was not consulting with his members about the privatization, and that the GON's intention to "reform" the PHCN on June 30 was impractical. He said privatizing the electricity sector was unwise when it generated fewer than 4,000 megawatts. The Bureau of Public Enterprises, which is overseeing the PHCN's privatization, estimated in 2005 that the company suffered generation and distribution losses of 40 percent, with the resulting power outages costing the country roughly $1 billion per year. ANYASO