NITEL - strike closes of SAT-3

NITEL Workers Take Strike Action, Close Sat-3 Submarine Cable Again

Employees at NITEL and its mobile subsidiary M-Tel embarked on strike action again this week to protest the non-payment of accumulated salary arrears, according to the Daily Independent. The strike resumes industrial action suspended 10 months earlier, and was called by two unions: the National Union of Post and Telecommunications Employees (NUPTE), and the Senior Staff Association of Communications, Transport and Corporations (SSACTAC). The strike disrupts consumers, but NITEL's customers have reduced dramatically and it now only has some 58,750 fixed lines (a 5% share of the total fixed-line market of 1.239 million) and M-Tel has just 258,520 mobile subscribers (a 0.5% share of the mobile market of 55.8 million). To press their protest home, employees have again shut down access to the Sat-3 submarine cable, over which NITEL still exerts exclusivity of access in Nigeria. This will disrupt international voice and data traffic into Nigeria. The Sat-3 cable in Nigeria was shut down by striking employees in April 2008, severely disrupting international voice and data traffc. Although the strike was suspended, the threat of its closure again as leverage by striking employees was brought up.

Significance: Because the Sat-3 cable from Nigeria has become so unreliable, Nigerian consumers are relying on alternative options and waiting for new submarine cables that will land in Nigeria. In addition to strike action, the cable suffered a month-long outage from mid-October 2008 when it was damaged offshore. Suburban Telecom has meanwhile built a fibre network to neighbouring Benin which also has a Sat-3 landing and increased the amount of bandwidth it is selling into Nigeria from 1 Gbps in September 2008 to 2.4 Gbps by the end of 2008. In little over a year, Suburban Telecom will soon have sold more than 10 times as much Sat-3 capacity via Benin that NITEL has in its seven years of monopoly access over the cable. Meanwhile, the Glo-1 cable being built by Globacom is due to enter service in March 2009, and the Main-One cable being built by Main Street Technologies in May 2010.