Nigeria: Over 3,000 Jobs Under Threat as SMEs Tackle MTN to Stay in Business


Concerned Nigerians and families of contractors who claimed to have done jobs for MTN Communications Nigeria Limited, gathered at Folomo roundabout, Awolowo Way, Ikoyi, Lagos, by the Corporate Headquaters of MTN to protest alleged refusal to pay for the services rendered to telecommunications giant.

Besides the alleged unpaid debts, the protesters said over 3,000 Nigerians stand the risk of losing their jobs and that many Small and Medium Enterprises, SMEs, engaged by the GSM provider, as contractors, will equally close down soon if government and other relevant agencies do not intervene urgently.

The protesters who chanted war songs and displayed anti-MTN placards, called on President Goodluck Jonathan, the National Assembly, NASS, National Communications Commission, NCC, organised labour among others to call MTN to order.

Efforts to get the response of MTN were unsuccessful security men at MTN's gate claimed they were under strict order not to allow in Journalists. Already, one of the affected contractors, Private Networks Nigeria, PNN, limited has petitioned NASS, NCC, among others, to prevail on MTN to pay it and other local contractors for various services to enable them pay their employees, meet their responsibilities to their families and remain in business.

In the petition by its Managing Director/Chief Executive Officer, Alhaji Abdulrahman Abiola-Odunowo, it urged members of NASS and NCC, to save SMEs in Nigeria from perceived MTN's strangulation policies as the telecommunications firm's refusal to pay local contractors for services rendered to it under contractual obligations was crippling their operations.

Alhaji Abiola-Odunowo in the petition, claimed MTN refused to pay PNN N923mllion for services rendered to it. According to the petition, "on February 8, 2008, the PNN entered into a Site Integrated Maintenance, SIM, contract with MTN for the management and maintenance of MTN's base stations in the Northern parts of the country, totaling about 1,000 sites.

PNN says it became the largest and one of the best SIMs contractors of MTN, soon after its engagement, receiving several awards in the industry, owing to its ability to deliver on contractual obligations and services. According to PNN MTN felt uncomfortable with PNN's growth, set out to ruin the mutual relationship.

MTN decided to challenge the credibility of invoices submitted by PNN on the basis of wrong site classifications. As a result, it asked PNN to reverse the invoices pending the outcome of a proposed Joint Audit, JA, by both companies. PNN agreed to the proposed JA, hoping its balance would be paid immediately after JA's findings.

When the JA established that PNN invoices were genuine, PNN resubmitted a variation invoice in the sum of N452million, which it lost as at September 2010, to MTN, as agreed prior to the JA.

Rather than pay the said amount, MTN became unfriendly and eventually, refused to pay for any of the services rendered by PNN before, during and after the JA. Consequently, in a move that was totally against the terms and conditions of the contractual agreement it signed with PNN, MTN demanded that PNN return all sites under its management without paying for what it owed."

"Having tried all avenues to get MTN to pay, without any result, PNN finally decided to institute arbitration proceedings against MTN, an action, which MTN agreed to and both parties selected and agreed on Akinsanya, as Sole Arbitrator. The Arbitrator however, in her final award delivered on the 20th April, 2011, ordered that the respondent (MTN), pay the sum of N115 Million to claimant (PNN), the respondent should also pay interest at the rate of 21% per annum from 1st day of June 2010 till the final liquidation of both the sum of N115Million and accrued interest.

The claimant says it is entitled to a refund of the sum of N100,030,411 and the interest thereon as this sum had been admitted by the respondent as being due to the claimant. All fund representing excess diesel supplied to the respondent must be paid the claimant. (A simple calculation revealed what exactly is due to the claimant.

The arbitrator directed that the respondent and the claimant should calculate the excess diesel that was consumed). The claimant's calculation of N907 million was also sent to MTN. However, in spite of the Arbitration award, MTN has refused to pay a kobo to PNN. And it is understood that MTN is making attempts to appeal the arbitration judgment in an attempt to nullify it."

The petitioner explained that its decision to "call on the Federal Government, the National Assembly and NCC to prevail on MTN to obey the nation's laws and contractual obligations signed with Small Enterprises by paying them for services rendered to it, is to rescue Small Businesses in the country from strangulation. PNN believes the actions of MTN over the years have had adverse effects on the majority of small companies.