Globacom denies owing billions of naira to distributors

Mergers, Acquisitions and Financial Results

Nigeria’s second telecommunications carrier, Globacom, has denied that it is owing its distributors billions of naira and is treating them unfairly. Bode Opeseitan was speaking in response to questions by NEXT following a demonstration on Wednesday in front of the company’s headquarters by members of the Association of Telecom Distributors of Nigeria. One of the allegations is that the company sells at a lower price to dealers who are related to its management than it does to other dealers.

Ayo Ojo, the president of the association, who led the protest had alleged in an interview with NEXT that, Globacom has ‘‘ cheated us of billions of money, that is why we are here. We were told to sell up to two million worth of recharge every month. We pay in the money to Globacom’s account before we collect the cards,” Ojo said, adding that the protest is the only way members of the association could draw the attention of the firm to their plight.

Ojo said, “The issue is that most of the pins in the recharge cards do not work and we have paid for them. The consumer returns it to us, when Globacom is contacted to change the cards or refund their money, we are told to come back today, come back tomorrow.”

According to him, this was not the practice with other service providers. “Other providers when their cards are spoilt, we inform them and they block the cards but Glo never blocks their cards when we inform them. Rather than listen to us constructively, they have turned deaf ears to us and are doing whatever they like. We have invested our resources and we want it back,” he said.

The association also accused Globacom of breaching an agreement it earlier reached with the dealers, by sidelining the association and dealing with other private individuals related to Mike Adenuga, the chairman of the firm.

Another dealer, who simply identified himself as Mr. Isaac, said, “We are dealers with Globacom set up. The agreement in the relationship was that we were told to go and get shops and we start buying from them. The problem now is that Globacom has sacked all the dealers and owes us huge sum of money. Glo would sell to us at a high price and will sell at a lower price to their relations and they will direct others to go and buy from them.”

According to the dealers, the problem with Globacom started when the telecoms firm unilaterally terminated the agreements reached four months earlier with them, for which they were given appointment letters in 2003, and were told to set up Glo shops around the country. The paints used in painting the shops were sold to them by Globacom.

But Mr. Opeseitan, insists, the company only has individual and not collective agreements with the dealers. He said, “In the letter of agreement reached with each of them, non-performing dealers will be de-listed. No agreement was reached with ATDON but individually, and letters of appointment, obligation and a minimum level was set for the dealers.”

Mr. Opeseitan explained that Globacom has been fair to the dealers, based on their performances, adding that a price monitoring team scrutinises the operations of the dealers; if any is found to have flouted the ethics, (that person) will first be suspended and thereafter, de-listed. The initial agreement was that each dealer had a monthly target of N20 million which they had failed to meet.

According to him, “The minimum level is N20 million since 2003 and none of the dealers have met this. Glo has been magnanimous with the dealers. They are not meeting the targets since 2003. “The bad card allegation is not correct, as serial numbers requited is to be reported to police and pin numbers used cannot be blocked,” he said.

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