Nigerian government sounds alarm on Nitel

The deterioration of the telecommunications infrastructure owned by Nigerian Telecommunications (Nitel) has the federal government worried.

Nitel is majority-owned by Transnational Corp. (Transcorp), which the government says has failed to live up to its agreement to manage the telco.

The government's concerns were publicly discussed recently by the minister for Information and Communication, Alhaji Ibrahim Dasuki Nakande. Nakande spoke at a seminar on the Internet for Jobs (I4J) initiative organized by the Nigeria Internet Group (NIG) and held in Lagos.

"The federal government is concerned over the welfare of Nitel workers," Nakande said.

Although Transcorp has a 51 percent share of Nitel, the government has the final say in restructuring decisions, in order to protect the government's stake. Transcorp has the right to invite new investors to participate, but the government must confirm any final decisions.

Nitel urgently needs new blood in the form of investors, Nakande said. The government concerns center on the inability of Nitel to meet payroll requirements.

Nakande warned that Nitel staffers might go back to their recently suspended strike, which grounded operations in several sectors of the economy, mainly due to the shutting down of the SAT-3 cable. Nitel employees went on strike in mid-April to protest what they claim is management's failure to pay wages. The strike was called off, but disagreement continues over what Transcorp still owes employees.

"Nitel is bleeding without first aid," Nakande declared. Nakande noted that most of Nitel's exchanges are down, "but we cannot allow NIitel to go down."

Nakande warned that Nigeria may be facing a major infrastructure catastrophe if urgent action is not taken. He said the government has made it clear to Transcorp that it has failed, and it needs to dilute its share of Nitel and its subsidiary, Mobile Telecommunications Ltd.

The government is set to conduct due diligence for new core investors in Nitel, Nakande said.

Meanwhile, Transcorp officials recently told the IDG News Service that in partnership with British Telecom (BT), it is seeking new core investors and is prepared to give up a 27 percent share in Nitel.