Tunisie Telecom's Dubai shareholder decries strike action

Walkouts by staff could scare off investors, warns Dubai conglomerate EIT
Protester generic
By Reuters
Mon 23 May 2011 12:18 PM

Strike action by Tunisie Telecom workers could scare off
foreign investors in the north African state, while the cancellation of its
initial public offering was not valid, a Dubai-based owner of a third of the
carrier said.

Strikers have stopped other employees of state-controlled
Tunisie Telecom reaching work, with call centres and shops most affected, said Deepak
Padmanabhan, chief executive of Emirates International Telecommunications
(EIT).

EIT - part of Dubai Holding, a conglomerate owned by Dubai's
ruler - bought a 35 percent stake in Tunisie Telecom for $2.25bn in 2006.
Tunisia owns the rest.

"The strike action is presenting a negative image of
Tunisia," said Padmanabhan. "If Tunisie Telecom is a case study for
how foreign investors are treated, then I believe this will make other
companies think again before investing and may look to other economies where
there is greater clarity and security."

Unions in Tunisia have been growing in influence since the
fall of former president Zine al-Abidine Ben Ali in January.

The telecoms union could not be reached. The dispute is centered
on 63 contractors it claims are overpaid.

Regular employees are classified as public servants and pay
rules mean Tunisie Telecom cannot compete for top staff unless it hires them as
contractors, Padmanabhan said. Rival players Orange and Tunisiana - a Qatar
Telecom unit - are not bound by the same rules.

"Why are the unions focusing on the removal of 60
employees rather than fighting for increased benefits for the remaining
8,450?" said Padmanabhan. "EIT wishes for a proper framework for a
social dialogue between the unions and Tunisie Telecom."

In Tunis and urban Tunisia, up to a fifth of staff are
estimated to be on strike, but in other regions up to 100 percent of employees
are boycotting work. The firm cannot confirm who is on strike and so continues
to pay all employees.

In February, Tunisie Telecom called off an initial public
offering after talks with union officials.

Padmanabhan said the talks should not be considered "a
valid or legally binding agreement" since chief executive Raouf Chkir --
who resigned soon after the meeting -- was not authorised to make a deal.

The IPO would have sold 20 percent of Tunisie Telecom, with
each shareholder selling 10 percent of the company.

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