Strike tests Tunisia’s economic hopes

The banner draped by strikers over an old communications ministry building in central Tunis last week pulls no punches. “A strategic partner – investment or colonialism?” it asks, referring to Dubai Holding’s stake in Tunisie Telecom. “Root out corruption,” says another banner.

The labour dispute at Tunisie Telecom has become ever more politicised amid instability following the overthrow of Zein al-Abidine Ben Ali in January. It has become a test of the interim government’s ability to meet the pent-up frustrations of the Tunisian labour force while also promoting a competitive economy.

Tunisie Telecom says that a resolution to the dispute will be announced soon and the company’s performance will prove resilient, in spite of weeks of closed offices and a halt to all but emergency engineering work.

Bills have not been sent out and people who want a fixed line or internet connection installed are having to wait.

“This is above all a political dispute,” says Walid Nefati, telecommunications specialist at, a website. The solution, he says, lies with the politicians.

Under Mr Ben Ali, Tunisia’s mobile telecoms sector, while small by global standards, offered fertile ground for European and Gulf investors – and more recently members of the ruling family.

In 2006, Emirates International Telecommunications, an investment arm of Dubai Holding, bought 35 per cent of Tunisie Telecom, the state-owned incumbent, for $2.25bn, its largest single investment.

Dubai Holding also bought into Karthago Airlines, owned by a brother of Leila Trabelsi, the president’s wife, and in 2007 its Sama Dubai arm announced a $14bn “Mediterranean Gate” real estate development, although this was never built.

In 2002, Orascom Telecom’s Tunisiana entered the market to compete with Tunisie Telecom in the mobile market. Last year, the operation attracted the interest of Sakher el-Materi, a son-in-law of Mr Ben Ali, who formed a consortium with Qatar Telecom and bought out Orascom.

At the same time, France Télécom formed a partnership with Marwan Mabrouk, another Ben Ali son-in-law, to launch Orange Tunisie, which became the country’s third mobile operator. To Tunisie Telecom’s annoyance, Orange Tunisie was granted a year’s exclusivity on its 3G licence.

Under the former regime, opposition by the country’s UGTT trade union federation to the part privatisation of Tunisie Telecom was muted. The union resisted any change to the members’ public employee status but the company was able to bring in more than 50 contractual workers, all Tunisians, in areas such as marketing, business research and distribution.

With the revolution in January, however, the telecoms sector has been thrust into the spotlight, and the stakes of the two Ben Ali sons-in-law in Tunisie Telecom’s rivals have been confiscated by the government.

The UGTT is keen to reinforce its revolutionary credentials and has secured the suspension of a programme of paid voluntary redundancies for Tunisie Telecom employees. A planned sale of 20 per cent of the company’s shares on the Tunis and Paris stock exchanges has also been called off.

Union demands have now shifted to the contractual workers with salaries sometimes double those of their colleagues: a typical contractual salary is TD2,800 ($2,060) a month, plus bonuses.

Mongi Ben M’Barek, secretary-general of the UGTT’s telecoms branch, says: “Tunisie Telecom is a public enterprise and all employees should be on the same pay scales.” He questions the award of the 35 per cent stake to a financial company, EIT, rather than to a big telecoms operator. “EIT thinks it is still January 13. They have to forget their relations with the former regime,” he says.

The contractual hires have also been subject to invective on the internet, where claims are made that they were recruited without due process.

“We are being scapegoated and these are libellous allegations,” says Hosni Mahjoub, a young French-educated business intelligence specialist.

“The organisation really needs these new skills to compete and the salaries are private sector market rates in Tunisia, never mind abroad,” says Badii Kechiche, a telecoms analyst at Pyramid Research in London.

Ahead of Tunisia’s first election since the fall of Mr Ben Ali, scheduled for July 24 although it might be postponed until the autumn, some UGTT members have formed a political party, the Tunisian Labour party, hoping to salvage some of the credibility the movement lost under Mr Ben Ali.

Nahda, the leading Islamist party, has also joined the polemic over Tunisie Telecom. The Ben Ali clan “dug their swords into the telecoms sector … The wolves of corruption surrounded it,” a columnist in its newspaper wrote last week, urging support for the strikers.

For its part, EIT has lobbied for company executives and ministers to move faster on finding a solution. “Union activity in Tunisia is potentially going to give a negative image for the country,” says Deepak Padmanabhan, EIT’s chief executive. “As an investor, EIT would like there to be greater clarity on how foreign investors will be treated.”

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