VODAFONE DEAL OKAY-Says GT management-But union disagrees

Front Page Lead
28-07-08

TWO of the key stakeholders in Ghana Telecom (GT) — the company’s management and the Communications Workers Union (CWU) — have taken divergent positions on the proposed sale of GT to the British giant, Vodafone.
The Chief Executive Officer of the company, Mr Dickson Oduro-Nyaning, has described the proposed sale of 70 per cent of GT shares to Vodafone as an opportunity to make the company more viable and strengthen its capacity to compete effectively on the market, but the CWU has expressed its opposition to the sale and rather called on the government to recapitalise the company, saying the current management has the capacity to effectively manage it, given the needed resources.
Stating the management’s take on the transaction, which is now before Parliament, Mr Oduro-Nyaning said the sale would inject $500 million into the company by Vodafone and that would help GT to properly roll out the network and improve the national fibre optic backbone.
Speaking with the Daily Graphic during an interaction with the management team of GT, Mr Oduro-Nyaning said the company needed a strategic partner like Vodafone to make it more competitive locally and internationally, adding that the GT was currently competing against foreign-owned telecommunication operators.
He explained that the investment would enable GT to bring in a variety of Vodafone products and services and the required investment to regain its market share, complete the fibre optic network, bring high-speed broadband and fixed-line services, expand the coverage and quality of the mobile network, among other things.
For instance, he said, as a result of the company’s current state, its mobile network, Onetouch, which was second best in mobile telephony in the country last year, was now third as a result of financial difficulties.
He explained that the economic viability of the company was not the best, saying that with the capital injection by Vodafone, GT would become viable and the remaining 30 per cent shares of the company left would appreciate for Ghanaians.
Mr Oduro-Nyaning said Vodafone would make GT part of an international network and that would make the company enjoy a new range of products and services, such as the mobile money transfer service (which enabled people without bank accounts to access financial services) and low cost, high quality mobile devices which would lower the cost of access to telecommunication services.
Vodafone, he said, would also bring revenue from mobile phone roaming voice and data traffic to GT, access preferential pricing for using GT’s mobile voice and data services.
“The Vodafone deal is good and we have to see the benefit that will come out of it,” he said, noting that Vodafone would invest in staff through customer service and IT skills, ensure that the Ghanaian management was nurtured and promoted with the company and offer international career opportunities to local talents.
Mr Oduro-Nyaning said once the Vodafone deal was through, GT would be better positioned to bargain with vendors and equipment suppliers, thereby receiving more favourable terms than was previously the case.
On the fate of GT’s 4,200 workforce, comprising technical and support staff, he said any worker who would be laid off or redeployed following the take-over would be adequately compensated according to the conditions of service of employees.
Members of management believed that the offloading of 70 per cent of the company to Vodafone must be done without any further delay.
They all agreed that the takeover be done now to position it on the international market, in view of the stiff competition from other telecommunication companies.
Advancing the position of the CWU, the National Chairman of the union, Mr David Korley Clottey, indicated that the company had the right expertise to run it to enable it to compete effectively with other telecommunications companies on the market.
“We the workers do not support the sale of GT per se. Our priority is to have a capital injection into GT,” he said, adding that the current management would be able to manage GT with the needed capital injection.
He told the Daily Graphic that the government could secure a long-term loan to revitalise the company, saying that it was possible to get people who could provide such a loan.
He conceded that the decision whether or not to sell GT lay with the government, but noted that as a Ghanaian “I wish GT would stay as a Ghanaian company”.
He expressed the fear that once an investor took over, it would retrench or lay off workers, saying, “This is our main concern.”
Mr Clottey charged Ghanaians to patronise the products of the company to make it economically viable.
Meanwhile, information available to the Daily Graphic showed that all the companies that have conducted due deligence on GT such as France Telecom, Etisalat from United Arab Emirates, Portugal Telecom and Vodacom last year to own 66.67 per cent of the shares, brought large contigents of people some numbering more than 40 to interact with GT staff at every level.
The information said the audited accounts for 2006/2007 showed that the current liability of the company far exceeded the current assets by three times which is against the industrial norm or practice.
In November last year, the major vendors of GT, Alcatel Lucent threatened to withdraw their maintenance and support staff for non-payment of accumulated maintenance fees and vendor supplies payment.
According to the report in February this year, IRS issued garnishment order to all GT bankers directing them to channel GT bank deposits and lodgements to IRS accounts following investigations conducted by IRS into GT for 2004/2005.
The amount was said to be about GH¢20 million(¢200 billion).
The Daily Graphic was told that as of now, GT has equipment locked up at bonded warehouses which it cannot clear due to its poor financial position.
A document on the Vodafone-GT transaction indicates that Vodafone has more than 269 million customers world-wide, 72,000 staff across the world, equity in 26 countries, partner networks in more than 40 countries, wholly-owned fixed line (voice and broadband) services in Germany, Italy and Spain, as well as fixed broadband services through wholesale agreement in the UK, Portugal, the Netherlands, New Zealand, Ireland and Egypt.
Its Africa assets include 54 per cent ownership of Vodafone Egypt, 40 per cent ownership of Safaricom in Kenya, 50 per cent joint venture in Vodafone with Telkom South Africa, in India 67 per cent ownership of Vodafone Essar, 100 per cent ownership of Vodafone Turkey, among others.