VZCZCXRO0310
RR RUEHLH RUEHPW
DE RUEHIL #2589 2131315
ZNR UUUUU ZZH
R 311315Z JUL 08
FM AMEMBASSY ISLAMABAD
TO RUEHC/SECSTATE WASHDC 8146
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHNE/AMEMBASSY NEW DELHI 3596
RUEHBUL/AMEMBASSY KABUL 8955
RUEHPW/AMCONSUL PESHAWAR 4645
RUEHLH/AMCONSUL LAHORE 5859
RUEHKP/AMCONSUL KARACHI 0114

UNCLAS ISLAMABAD 002589 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON ECPS EINT PK
SUBJECT: TELECOM WORKERS END STRIKE THAT TIED UP LINES AND 
THREATENED NATIONWIDE SHUTDOWN 
 
Summary 
- - - - 
 
¶1. (U) Communications giant Pakistan Telecommunication Co. Ltd. 
(PTCL) has been beset by labor-relations controversies since its 
privatization in 2005.  In the latest chapter, PTCL employees went 
on a two-week strike, which ended July 30, over the introduction of 
the Unified Pay Scale (UPS).  The employees' union rejected the UPS 
and threatened a nationwide shutdown of the telephone system until 
PTCL management capitulated with a new compensation package offering 
a 35 percent pay increase.  The strike noticeably affected PTCL's 
ability to provide service to its customers, although cell phone use 
mitigated much of the strike's effects for the general public.  End 
summary. 
 
¶2. (U) After the UAE telecom company, Etisalat, took over PTCL 
following privatization, management agreed to convert the employee 
pay-scales from the government structure to a corporate package 
which would be commensurate with market salary rates.  The result 
was the UPS, which was uniformly rejected by the PTCL employees as a 
"fraud" and part of an on-going effort by Etisalat to deprive them 
of their basic rights.  The UPS package offered an 8-13 percent pay 
increase for non-management workers.  Although this would have 
raised salaries above the previous government pay-scale rates, the 
PTCL employees argued that a 40 percent increase was needed to bring 
their salaries up to market levels. 
 
¶3. (U) Speaking to the press, Pakistan Telecom Employees Union 
Collective Bargaining Agent (CBA), President Ziauddin, said that 
since its privatization, the PTCL had resorted to various tactics to 
exploit the employees, and gave the recently introduced Voluntary 
Separation Scheme (VSS) as an example.  He said that although the 
VSS was meant to be voluntary, terminology such as "redundant" and 
"surplus, not needed" were used in the calculation worksheets, 
indicating that the scheme is a euphemism for lay-offs and implying 
that workers who did not opt for the scheme would be fired.  The 
Voluntary Separation Scheme has not been offered to non-management 
staff, although 25,000 to 30,000 management grade officers left PTCL 
under the VSS.  Ziauddin claimed that the UPS was a similar 
exploitative effort aimed at non-management workers. 
 
¶4. (U) After withdrawing the UPS on July 17, PTCL did not 
immediately propose a new compensation package, prompting the 
employees to continue striking.  The striking workers also demanded 
the reinstatement of some 200 to 250 workers who were fired outright 
as well as direct action against police involved in a baton-charge 
and teargas skirmish with PTCL employees protesting outside the 
company's headquarters in Islamabad.  On July 30, after protracted 
negotiations, PTCL announced a 35 percent pay increase for 
non-management grade workers.  The workers' union accepted this 
offer, bringing the strike to an end. 
 
¶5. (U) The striking workers had threatened on July 28 to overwhelm 
the circuits forcing a nationwide shutdown of the telephone system. 
In response, the Army Rangers were ordered on stand-by on national 
security grounds to assist local and provincial police in preventing 
sabotage.  PTCL's ability to provide service has been severely 
affected by the strike which has led to long delays in handling 
customer complaints and new line installation requests.  Emergency 
services' help lines were also adversely affected in some areas. 
PTCL has 4.4 million customers nationally. 
 
 
Comment 
- - - - 
 
¶6. (U) As Pakistan's largest telecoms provider, PTCL's woes created 
a ripple effect beyond the telecommunications industry as services 
that depend on reliable telecommunications were affected.  Cell 
phone services (especially from service providers other than PTCL) 
were not significantly impacted and mitigated much of the strike's 
effects on the general public.  Service delays can also affect 
internet connections in addition to the terrestrial telephone 
network.  PTCL was the source of a technical error that caused the 
global outage of the popular video-sharing website, YouTube.com, in 
February 2008.  End comment. 
 
 
ARCHIBALD