Etisalat crisis worsens

.           Staff to strike over unpaid salaries

.           It poses great risk to economy – CBN

By FELIX OLOYEDE

Nigeria’s embattled telecommunication firm, Etisalat Limited, appears to be moving deeper into troubled waters as some of its mid and lower level workers have concluded plans to down tools over unpaid salaries, sources have told Business Hallmark.

It was gathered since the telecoms firm entered into financial difficulties, it has been unable meet its financial obligations to its workers as at when due.

This development, BH gathered, has severely affected the workers, making most of them, particularly those at the firms friendship centers scattered all over the country, to openly complain and calling for showdown. They also complained that apart from being poorly remunerated, their salaries and allowances are also not paid in time.

One of the sources in the service of the troubled company who did not want her identity disclosed, said that workers morale are at an all time low over late payment of their salaries.

“Despite the fact that they pay us miserly wages, compared with our colleagues in the telecoms sector, we are being owed between one to three months salaries, depending on your level.

“Most of us, with the exception of the spineless few, have now resolved to proceed on industrial action to press home our demands. This is the best time to do that when the attention of the whole world is on the company. If we allow the momentum to swing without making proper use of it, we may live to regret it”, she said.

Another worker at the Ijaiye-Ogba centre of the firm, who did not want to be identified, said that the steady rise of the company’s profit does not reflect on their take how pay.

The company’s management is more concerned with funding other ‘pressing needs’, such as network expansion and debt repayment to its workers detriment .

Apart from the workers increasing restlessness, BH also gathered that Etisalat Nigeria’s debt burden have taken a big toll on its operations as over 2.9 million subscribers left its network between the last quarter of 2016 and first quarter of 2017.

The latest data by the Nigerian Communications Commission (NCC) shows that as of September 2016, there were 22.5 million active subscribers on the network but the figure dropped to 20.8 million by December. This represents a loss of 1.7 million subscribers within three months.

The drop, thus, represents a loss of about N3.1bn potential revenue for Etisalat for the quarter, going by the industry’s average revenue of N1, 830 per user, according to the quarterly subscriber operation data obtained from the NCC.

Similarly, in the first quarter of this year, the telco lost 1.2 million subscribers. This is also estimated to cost the telecoms company potential revenue of about N3.8bn.

However, between September last year and end of March, this year, Globacom increased its subscribers from 36.9 million to 37.3 million; Airtel grew from 34.1 million to 34.6 million but MTN dropped in subscriptions from 60.5 million to 60.3 million.

It is expected that the figure will further decline by the time the NCC releases its report for the second quarter of 2017 in July.

Meanwhile, following the deepening crisis between Etisalat and a consortium of 13 Nigerian Banks over a syndicated loan of about $1.2 billion granted the telecom company by the banks, the Central Bank of Nigeria (CBN) on Friday, June 23, 2017, said it and the Nigeria Communications Commission (NCC) decided to intervene in the crisis in order to prevent job losses and asset stripping.

Confirming the intervention of the two regulators in the loan dispute, the CBN Spokesman, Isaac Okorafor said: “Although it should ordinarily not be the role of a regulator to decide how individual bad loans are resolved, the CBN believes that Etisalat is a systemically important telecommunications company with over 20 million subscribers that if not well handled, may have negative implications for the banking system itself.

He further explained that the CBN and NCC, sensing that banks might go ahead in the usual way and downsize the company’s over 4,000 staff, reached an agreement to intervene and implore the consortium of banks to be reassess its position in dealing with Etisalat.

Okorafor described some media reports insinuating high-handedness by CBN on the issue as “the height of mischief and insensitivity”,  explaining that the collaborative move by the regulators was aimed at preventing job losses and asset stripping and to ensure that Etisalat remains in business and is able to pay back the loans.

According to him, the CBN and the NCC, in the coming days, will meet with the syndicate of banks and the IHS Towers, the tower managers and the equipment suppliers, in order to achieve what he termed “a win-win outcome” for all stakeholders.

It would be recalled that Etisalat has been embroiled with a consortium of 13 Nigerian Banks that gave it a facility of about $1.2 billion, on which the company has been unable to meet its repayment obligations in line with agreed terms of the facility.

Given the inability of Etisalat to come to an acceptable agreement with the banks, the largest shareholder in the company, Dubai-based Mubadala Development Company of the United Arab Emirates, has now pulled out of the company as well as the ongoing negotiations, leaving only their local partners, led by Hakeem Belo-Osagie, to carry the burden.

It was based on the attempt of the banks to take over the company that the financial and telecommunications regulators have moved in to intervene and forestall downsizing and asset stripping.