It
is no longer news that MTN acquired Visafone the nation’s only surviving
CDMA licence operator. The news no doubt entrenches MTN as a market
leader despite the impasse between it and the Nigerian Communications
Commission (NCC) over the huge fine imposed by the regulator for failing
to deactivate subscribers with incomplete registration details on its
network.
MTN and its circle of
stakeholders argue that the acquisition is a plus for the Nigerian
economy; On the surface their argument looks good but do not be deceived;
isn’t it a Greek gift? A closer look will reveal that huge dangers awaits
workers, families, subscribers and the nation both in the immediate and in the
long run.
stakeholders argue that the acquisition is a plus for the Nigerian
economy; On the surface their argument looks good but do not be deceived;
isn’t it a Greek gift? A closer look will reveal that huge dangers awaits
workers, families, subscribers and the nation both in the immediate and in the
long run.
Lets take a dive at some
of them
of them
… job losses at Visafone
First on the chopping block was the sacking of
over 2000 Visafone employees while unspecified number of employees had been
gradually phased out before the deal was sealed. Although MTN quickly announced
the recall of some of the sacked staff in response to public outcry, the fact
remains that the recalled workers may be forced to accept unfavorable remuneration
and employment conditions under MTN, or be eased out of the system over time
due to redundancy.
over 2000 Visafone employees while unspecified number of employees had been
gradually phased out before the deal was sealed. Although MTN quickly announced
the recall of some of the sacked staff in response to public outcry, the fact
remains that the recalled workers may be forced to accept unfavorable remuneration
and employment conditions under MTN, or be eased out of the system over time
due to redundancy.
… making a bad situation
worse
worse
Naturally, most sacked employees in many public
and private enterprises that ended up in mergers and acquisitions that have
taken place in Nigeria are the worst for it. For example, the bulk of former
staff of defunct national carrier, NITEL and its mobile arm, M-tel have not yet
received their compensations almost a decade after the sale of the entities.
Same applies to some former staff of Nigerian Airways Authority over three
decades after the death of the national airline. What of those disengaged in
the wake of the unbundling of Power Holding Company of Nigeria (PHCN)?
and private enterprises that ended up in mergers and acquisitions that have
taken place in Nigeria are the worst for it. For example, the bulk of former
staff of defunct national carrier, NITEL and its mobile arm, M-tel have not yet
received their compensations almost a decade after the sale of the entities.
Same applies to some former staff of Nigerian Airways Authority over three
decades after the death of the national airline. What of those disengaged in
the wake of the unbundling of Power Holding Company of Nigeria (PHCN)?
The spiral effect of retrenchment or
unemployment is better imagined in a fragile economy like Nigeria. High rate of
unemployment increases crime rate, decreases purchasing power and increases
poverty. The fall-out of MTN/Visafone acquisition just affirms how company
acquisitions push productive Nigerians into the already saturated employment
market and its inherent adverse consequences.
unemployment is better imagined in a fragile economy like Nigeria. High rate of
unemployment increases crime rate, decreases purchasing power and increases
poverty. The fall-out of MTN/Visafone acquisition just affirms how company
acquisitions push productive Nigerians into the already saturated employment
market and its inherent adverse consequences.
… destroy smaller
operators
operators
The acquisition of
Visafone grants the already dominant operator, MTN an undue advantage to use
the 800MHz spectrum licence for enhanced data services which gives it
dominance in the data services market including the market share owned by
smaller data centric players like Smile, Swift Networks and Intercellular
amongst others. More importantly, this situation will certainly put these less
financially buoyant and smaller operators including NATCOMs who only recently
acquired the assets of NITEL, at risk unless they can afford the financial
wherewithal to match MTN.
Visafone grants the already dominant operator, MTN an undue advantage to use
the 800MHz spectrum licence for enhanced data services which gives it
dominance in the data services market including the market share owned by
smaller data centric players like Smile, Swift Networks and Intercellular
amongst others. More importantly, this situation will certainly put these less
financially buoyant and smaller operators including NATCOMs who only recently
acquired the assets of NITEL, at risk unless they can afford the financial
wherewithal to match MTN.
In the absence of the
financial capacity to compete effectively, it is a matter of time that the
smaller operators would be out of business. For those that may remain in
operation, the cost of staying afloat would certainly be high while the natural
decision organisationsfavour in situation like this is to lay off their staff
or downsize.
financial capacity to compete effectively, it is a matter of time that the
smaller operators would be out of business. For those that may remain in
operation, the cost of staying afloat would certainly be high while the natural
decision organisationsfavour in situation like this is to lay off their staff
or downsize.
Adeko is a public
affairs and policy analyst
affairs and policy analyst
–>
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