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Cablegate: Nigeria Telecom Strike Ends Briefly, Resumes

VZCZCXRO1017
PP RUEHMA RUEHPA
DE RUEHUJA #1517/01 1670617
ZNR UUUUU ZZH
P 160617Z JUN 06
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC PRIORITY 6113
INFO RUEHOS/AMCONSUL LAGOS 4365
RUEHZK/ECOWAS COLLECTIVE
RUEHC/DEPT OF LABOR WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

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
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

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