By Amechi Ogbonna
Barely two weeks after it changed its corporate identity three international telecommunications services providers have expressed interest to acquire or buy into Nigeria’s 9mobile (formerly Etisalat Nigeria) to leverage its estimated 20 million subscribers to compete in the Nigeria’s telecoms industy.
A reliable banking industry source listed India’s Bharti Airtel, which already has a presence in Nigeria, as having expressed interest in acquiring 9mobile, a competitors, while Britain’s Vodafone and French telecom group Orange have also shown interest to enter Nigeria’s burstling telecoms market using its 20 million existing subscribers the source said.
Already 9mobile has appointed Citigroup and South Africa’s Standard Bank to manage its sale process and has received interest from three investors, a banking source close to the deal said on Tuesday.
This was a Godwin Emefiele, Governor, Central Bank of Nigeria (CBN) at a briefing after the Monetary Policy Committee Meeting in Abuja yesterday assured that 9Mobile, Nigeria’s 4th biggest telecommunication firm remains strong with a solid revenue base of over N16 billion a month.
Emefiele who said the apex bank intervened in Etisalat’s (now 9mobile) to avert operational crisis and save its 4,000 workers, 20 million subscribers described its N16 billion monthly revenue as too significant to be lost in a struggling economy like Nigeria.
The CBN boss explained that its partnership with another regulator, the Nigeria Communications Commission (NCC), to save the embattled firm few weeks ago was to stave off its imminent collapse due to its huge contribution to the nation’s economy.
“Etisalat employs more than 4,000 workers, and has about 20 million subscribers nationwide,’’ Emefiele said.
He noted that the apex bank and NCC could not have allowed the company to go down because of the negative impact of its crash on jobs and the economy.
While expressing delight in the show of interests by some potential investors in the rescue of the communications company, Emefiele said that the regulatory interventions were temporal.
“The intervention is temporal, it should not last more than 90 to180 days.
“I am gratified that potential investors are taking part,’’ Emefiele said.
Etisalat had been struggling to meet its contractual agreement with its thirteen creditor banks before the intervention of the NCC with the support of the CBN.
For his part, the Minister of Communications, Adebayo Shittu, said the Federal Government has stepped into the crisis to save Nigerian employees as well as subscribers.
A statement issued by Henshaw Ogubike, the Deputy Director Press in the Ministry, noted that Mr. Shittu gave this hint when members of the new management of 9Mobile network provider visited him in his office on Tuesday in Abuja, yesterday.
Recall that Abu Dhabi’s Etisalat had last month terminated its management agreement with its Nigerian arm and gave the business three weeks to phase out the brand in Nigeria.
That decision was taken after talks with Nigerian regulators to save Etisalat Nigeria from collapse failed to resolve its $1.2 billion loan deal.
All UAE shareholders of Etisalat Nigeria have exited the company and have left the board and management, Hatem Dowidar, the CEO of Etisalat international said in an interview.
He said discussions were ongoing with Etisalat Nigeria to provide technical support, adding that it can use the brand for another three-weeks before phasing it out.
At the unveiling of its new corporate identity as 9mobile, its Chief Executive, Mr Boye Olusanya, hinted the company was now open to new investors and partnerships. Olusanya said that with the migration to a new name and brand, 9mobile promises to sustain and continuously provide innovative and value-adding propositions, which it had delivered since inception nine years ago.
He said the new brand identity reflected the bold and creative attributes which the company shared with its valued subscribers.
According to him, the rebranding will enable the company to connect more with its subscribers, especially the youth.
“In our nine years of operations, we have remained at the forefront of innovation and take pride in consistently delivering superior experiences to our subscribers.
“We continue to establish meaningful partnerships with our customers and partners by providing platforms that support their goals and aspirations,’’ he said. He said that the new identity was another phase of the telecommunications company’s evolution over nine years of operations in Nigeria.
Reacting to the news of new investors coming to 9mobile, Abiola Ogundeko, telecoms stakeholder explained that the new investors should be careful because the earlier brand exited due to financial misappropriation. Once the investors can tackle the liabilities and ask questions if the telecoms operator is worth investing on, they can make their decisions.
Obinna Elechi, an industry watcher noted that lender banks should guard their equity because what happened in Nigeria was synonymous to Africa, saying, “Banks hurriedly gave loan without enough dollar quaranty.
A lot of the blue chips are not really blue chips. The banks did not take enough collateral and that is why we are where are.
“Nigeria banks should structure their loan better by asking for international quaranty. This would help to curb free entry and exit that we saw in the major shareholders of Etisalat. That is why they can take their capital and go and start elsewhere. New investors should be quizzed and requizzed before they are allowed to invest in the company”.
Nigeria has one of the largest telecom markets in Africa, supported by the largest economy on the continent. Given the potential for further growth, the sector attracts considerable foreign investment. Market liberalisation measures in recent years have led to hundreds of companies, many of them small and localised, being set up to provide a range of telecom and value-added services. The telecommunications sector contributed N1.399 billion to Nigeria’s Gross Domestic Product, GDP, in the 4th quarter of 2016, the National Bureau of Statistics, NBS, has said.
In a report, early this year, the NBS noted that the total number of subscribers continued to increase rapidly growing from 19,519,154 subscribers as at the end of 2005 to a total of 154,529,780 subscribers by December 2016.
According to the report titled “Nigeria Telecommunications Sector Summary Report”, the total number of subscribers in 2015 was 151,017,244.
The telecommunication sector’s contribution to GDP, the report said, decreased by 1.8 per cent from the N1.58 billion in the previous quarter to about N1.4 billion.
It stated that as at the end of the fourth quarter of 2016, there were 154,529,780 subscribers, compared with 153,299,535 in September 2015, which represents a quarterly increase of 0.80 per cent.
According to the report, due to differing seasonal patterns, telecommunications tends to account for the lowest share of GDP in the third quarter, stressing that the share of telecommunications in total real GDP had declined throughout 2010 to 2014.
According to Nigerian Communications Commission (NCC), the telecom industry contributed 8.9 per cent to the National Gross Domestic Product of the country against the 8.6 per cent in 2015.