Unions oppose privatisation of Telefónica

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At the beginning of 1997, the total privatisation of Telefónica, the largest Spanish telecommunications firm, was completed. The trade unions in the company, led by CCOO and UGT, have applied for a judicial review of this measure, demanding its suspension until the new regulatory framework for the sector is defined, and a public, universal and quality service is guaranteed in the area of telecommunications. The Supreme Court has agreed to consider the appeal but has not suspended the privatisation.

Liberalisation of telecommunications

The privatisation of Telefónica forms part of the process of liberalisation of the telecommunications sector in Spain that started in June 1996. Since that date the Government has carried out significant measures in the sector including: the elimination of the monopoly of the basic telephone service, previously in the hands of Telefónica; the creation of a second telephone operator; and a loosening of restrictions on foreign investment in the sector.

In the context of these measures, the Government also undertook the total privatisation of Telefónica, approving in December 1996 the sale of 21% of its shares, that is, the total state shareholding in the company. Privatisation was carried out between January and February 1997, and Telefónica passed into the hands of three banks which jointly control 15% of the shares.

This process of liberalisation and privatisation has been implemented in a context of great uncertainty over the subsequent regulation of the sector. The Law of Telecommunications Regulation is clearly obsolete and expires soon, though no great progress has yet been made on the development of the General Telecommunications Law that is to replace it. Meanwhile, the Government has passed a Royal Decree which aims to introduce certain guarantees into the total privatisation of Telefónica, requiring administrative authorisation for changes in the shareholding of over 10% and for changes in the strategic decisions of the company.

Position of the trade unions

The trade unions represented in Telefónica, led by CC.OO (Comisiones Obreras) and UGT (Unión General de Trabajadores), have from the start been against the process of liberalisation of the sector and privatisation of the company, considering that it threatens the public and universal nature of the service provided.

In the opinion of the unions, telecommunications play an increasingly important role in business and society, even to the point where present-day society is called "the information society". It is therefore not a question of defending only the public and universal nature of telecommunications, but also its quality, in accordance with technological progress and the appearance of new needs in society. They feel that this approach is being respected in other European countries, where the privatisation of the large telecommunications monopolies leaves in the hands of the state a shareholding sufficiently large to guarantee that the general interest prevails in the orientation of the sector.

From this viewpoint, the unions claim that Telefónica was totally privatised before the drawing up of the new General Telecommunications Law, which among other things must establish the concept of a universal public service, the obligations which this engenders, who provides it and how, and how it is financed. They consider that the privatisation of the company will clearly affect the future commercial regulation of the sector, with the obvious risk of dividing the supply of services: it is feared that the concept of a universal public service is being defined in minimum terms, establishing criteria of pure profitability for the provision of the most innovative - and in the long run the most important - services.

This view is reinforced by anxieties over the consequences that privatisation may have on the volume of employment and working conditions. On the one hand, technological innovation is leading to a significant decrease in the size of the workforce. On the other hand, outsourcing - through many levels of subcontracting - has led to a considerable increase in precarious employment. In the opinion of the trade unions, reductions in employment and deterioration in working conditions will be intensified by the total privatisation of the company.

Trade union action against the privatisation of Telefónica

The trade unions have appealed for a judicial review of the Government's decision on total privatisation, on the grounds that the Law of Telecommunications Regulation states that "telecommunications are considered as essential state-owned services reserved for the public sector". In this appeal they demand the suspension of the privatisation process until the new regulatory framework for the sector has been defined. This move has been accompanied by various forms of action - such as meetings of workers and interviews with the regional parliaments or governments - which have received the support of left-wing political parties. The Supreme Court has agreed to consider the appeal, though it has not halted the privatisation. The trade unions include the appeal amongst the many measures that they are prepared to take to redirect the process of privatisation and liberalisation of the sector. They thus demand a general debate on the regulatory framework for telecommunications, believing that trade unions should be able to take part.

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