Crisis Prone Cellular Company Novafone Redundant Employees
Monrovia – When Novafone, a GSM service provider hit the Liberian market in 2013, many were zealous that a third major competitor has emerged in the Liberian mobile communication industry to fight for market share with the two leading GSM service providers -Lonestar cell and Cellcom.
“The management of Novafone hereby informs you that the post of Sales Agent will be redundant as of June 30, 2016. Your end of Service (Severance) payments consistent with the requirements as provided for in the Decent Work Act is being processed.
Please liaise with the Human Resource (HR) should you have further concerns”- Bechir El-Khoury, Chief Executive Officer (CEO), Novafone
Many Liberians knowing what competition has done for the affordability of GSM services in Liberia where the emergence of Cellcom led to drastic reduction in exorbitant fees charged by the Lonsetar Cell, many were happy to see a new entrant on the market, expecting another big improvement in services and reduction in prices, but within less than three years that dream now looks farfetched.
When Novafone hit the market, it initially lived up to the expectation of many, providing affordable and fast internet as the company was dubbed the provider of one of the best internet services in the country.
Novafone quickly got a sizable number of customers for its fast and affordable internet services but within a short spam, the company has gone down the ladder in last few months.
In the last few months Novafone has taken the public limelight for the wrong reasons, ranging from a foiled US$10 million controversial plan by the Liberia Telecommunications Corporation (Libtelco) to take over the struggling cellular phone.
Sabastian Muah, head of Libtelco explaining the Novafone takeover deal said “Our understanding of the Lonestar/MTN deal, the core network equipment was not part of the deal and Lonestar was willing to leave the modern core equipment, and again just buy Novafone out of competition for about $16-18 million dollars, ignoring loss of jobs and the network equipment valued at $9 million.
This would put the value of Novafone at worse case $25 million or ideal case $27 million. We went for $24 million – million less than the worst case.”
Muah at the time insisted that the deal which was still in negotiations is clean. “This was a clean and fair deal. Lone star just lost in the commercial bid. Our lawyers and accountants on this were Negbalee Warner and Baker Tilly. They did a very thorough work.”
The takeover deal was heading for success when President Ellen Johnson Sirleaf wrote a letter quashing the entire process.
President Sirleaf apparently sided with the court of public opinion that the controversial plan by the Liberia Telecommunications Corporation (Libtelco) to take over the struggling cellular phone companies is a bad one.
FrontPageAfrica reliably learnt from multiple sources at the time that the President rejected the deal in its entirety, declaring to aides that it is not in Liberia’s best interest thereby rejecting plans by Libtelco to sanction a sale.
One source stated that the President through a communication instructed Acting Finance Minister James Kollie to immediately terminate all negotiations regarding the Novafone deal.
The source fell short of revealing what prompted the decision by the President but did say that the President instructed the Minister to revoke any instruction that has already been given or approval of the deal immediately.
Before the takeover deal hit rock, the Liberia Revenue Authority found the company in the web of tax evasion of over US$1 Million.
A month ago, in its vigorous drive to collect lawful taxes due the government and people of Liberia the LRA sealed the doors of five major businesses including Novafone for failure to settle tax obligations but the cellular company denied a FrontPageAfrica report that it was shut down for tax evasion in the tune of US$1.3M but company admitted that it owes US$1.3m in license fees.
Executive Vice President of Novafone, Abdullah Kamara at the time said the story was an attempt to tarnish the corporate image of Novafone even though the locks were visibly placed on the gate of the building housing the company headquarters.
Amid these controversies surrounding the company, FrontPageAfrica has gathered that the company is facing serious financial crisis and has resulted to laying off large number of its employees.
A copy of a letter served many of the company employees, a copy obtained by FPA indicates that Novafone is carrying out massive redundancy of employees and is processing their severance payments.
In a letter dated May 31, the company informed several employees that consistent with the Decent Work Act their severance is being processed to be paid.
Stated the letter: “The management of Novafone, hereby informs you that the post of Sales Agent will be redundant as of June 30, 2016. Your end of Service (Severance) payments consistent with the requirements as provided for in the Decent Work Act is being processed. Please liaise with the Human Resource (HR) should you have further concerns”.
The letter signed by Bechir El-Khoury, Chief Executive Officer (CEO), Novafone led to many of the affected employees going home disappointed not knowing where to turn.
One effected employee told FPA that in recent months the company has been finding it difficult to pay their salaries on a timely basis.
“We knew things were going to end like this, because these few months, we cannot even get our pay on time”, the employee who begged not to be named said.
Novafone in 2013 entered the fray with the purchase of Comium GSM, a global services mobile (GSM) company which also struggled to gain a footing on the tight but competitive market.
At the time, Novafone pledged to introduce a 4th Generation of mobile communications and promised to cover 85% of Liberia.
The company was cautioned at the time by Angelique Weeks, Managing Director of the Liberia Telecommunications Authority, who emphasized that the competition in the sector was high.
Within weeks, Novafone dispatched sale agent in several counties, wearing the company t-shirts selling scratch cards and marketing the company.
A collapse of the company will lead to massive loss of jobs in a country already facing huge unemployment.