As a consequence of dwindling revenue, leading Global System of Mobile communications provider in the country, MTN Nigeria, on Monday disengaged 252 of its engineers who were responsible for the operation and maintenance of its base stations nationwide.
Our correspondent gathered that most of the disengaged engineers joined the company at inception in 2001 and were involved in the day-to-day running of MTN’s 10,000 base stations all over the country.
The company had earlier in March explained that it and other operators were facing the challenge of not only stagnating revenues, but also increasing operating expenses.
According to MTN, the network expenses of the operators are increasing due to the overall high inflationary environment along with their network expansion activities, illegal and multiple taxation, high cost of providing power and rising inflation, among others.
For instance, the company said in 2013, the N34bn spent on diesel formed 12 per cent of its total operating expenditure cost, which could have been used to construct 5,200 new base stations.
It said, “Over 200 per cent reduction in headline price points to massive free-fall in tariffs within three years through aggressive price war.
“The aggregate spend per subscriber has reduced in the same proposition with the expected net effect from new additions not being sufficient to drive profitable growth.”
As a consequence, the firms said it took a decision to focus strictly on areas that would directly impact on its operations, while outsourcing ancillary services to independent service providers.
Following this decision, MTN signed managed services contracts with global telecommunications solutions providers, Ericsson and Huawei, who have agreed to absorb 232 out of the 252 disengaged engineers from today (Tuesday).
The fate of the remaining 20 is unclear as sources in MTN explained that they might have decided to leave outright rather than transfer their services to other companies, or that they fell short of the requirements of Ericsson and Huawei.
The company had said in a statement in October last year, “Under the terms of the contracts, Ericsson will take over the management, optimisation and field maintenance of MTN’s network infrastructure in Abuja, Lagos, as well as the southern and eastern regions. On the other hand, Huawei will manage Kano and Ibadan regions, thus allowing MTN to focus on providing a superior customer experience across all its network offerings.
“MTN will retain ownership and full control of its network assets and continue to have responsibility for strategic design and planning, as well as equipment purchasing decisions.”
Our correspondent learnt on Monday that the agreement between Ericsson and Huawei specified that the disengaged engineers would be mandatorily engaged for one year and placed on the same salaries as they were earning in MTN, or even more, after which the firms could decide to continue with their services or not.
It was further gathered that in order to make their disengagement seamless and devoid of controversies, MTN implemented a “generous” severance package for the affected workers, and ensured that they did not join the growing list of unemployed people by moving on to another job straight away.
When contacted, the spokesperson for MTN Nigeria, Mrs. Funmi Onajide, referred our correspondent to her colleague, Mr. Funso Aina, who said the company stood by its position as stated in the October 2013 press statement.
The statement had quoted the Chief Executive Officer, MTN Nigeria, Mr. Michael Ikpoki, as saying, “This engagement with Ericsson and Huawei is a logical step forward in the course of the steady evolution of the telecommunications industry.”