“All progress on mobile, internet and data usage penetration would be sustained for increased investments and effective regulation of the telecom sector”
Chinenye Anuforo
Perhaps for most Nigerians, the biggest telecom sector news of 2018 can be said to be the sale of 9mobile to Teleology Holdings Limited.
Teleology: What stakeholders want from 9mobile deal
The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC), in their
roles as regulators, opted for an innovative approach to dealing with a distressed company, which 9Mobile’s predecessor, Etisalat, had become when investors from Mubadala Group, Etisalat International, pulled out of Nigeria. Heavily indebted, the glaring option would have been for EMTS to close shop, throw 4,000 employees into the unemployment market, disconnect 22 million Nigerian subscribers and collapse the network of competitors that would have struggled to absorb these subscribers at short notice and jeopardise businesses that run on the network. Of the companies that indicated interest, five made it to an advanced stage. One pulled out of the acquisition bid, two were dropped for not including financial offers in their bids, leaving Smile Telecoms and Teleology Holdings Limited, which made offers, as the last two standing. Financial advisor to the transaction, Barclays Africa, after its analysis of the offers, named Teleology as the preferred bidder. By default, Smile became the reserve bidder, waiting in the wings to snatch 9Mobile where the preferred bidder was unable to meet its obligations for the phased payment. Teleology, however, met the first timeline by paying the initial $50 million deposit within the stipulated timeframe.
After about eight months when it made the initial $50 million non-refundable deposit to acquire 9mobile, Teleology holdings was given final approval of no objection by the board of the NCC to own the telecommunications company. The company also immediately constituted a new board of directors to manage the affairs of the company following the disbandment of the interim board which held forth while the bid process and payment negotiations lasted.
ICT sector attracted $40bn FDI in 2018
About $40 billion Foreign Direct Investment (FDI) came into Nigeria through the Information and Communication Technology sector of the economy, the Minister of Communications, Dr. Adebayo Shittu, said.
This is an increase of $8bn over the $32bn FDI that came into the country in 2015, Shittu also stated.
He made these known during the official session of the 6th regular meeting of the National Council on Communication Technology (NCCT) which took place in Abeokuta, Ogun State.
The minister said the performance of the telecommunications industry also improved, noting that there was
a positive increase in the number of active telecoms subscribers with an increase from 148,70 million in August 2015 to 162.05 million as at September 2018 – an increase of 7%.
NCC okays telecom operators to trade in spectrum
The Nigerian Communications Commission in the year under review approved that telecommunications operators and other licensees of the Commission can begin trading in spectrum in the next one month.
Danbatta, said this in Abuja while speaking with journalists at the review of the submissions made by stakeholders on the Draft Spectrum Trading Guidelines.
Spectrum can be described as the life-blood of telecommunications. It is a range of electromagnetic waves or frequencies through which sound and data are transmitted from one place to another.
Sometimes, operators fail to utilise spectrums that they obtain from the telecommunications regulatory agency. But without the approval for its trading, they cannot share or sell such spectrum to others who have better need of the frequency.
Danbatta said the final guidelines for trading in spectrum including approval by the board of the commission would be ready to enable exchange of spectrum from one operator to another.
He said, “You have witnessed today a public enquiry on spectrum trading, leasing and sharing. The whole idea is to ensure this important national resource is optimally utilised for the delivery of qualitative telecommunications services.
“Today, we have seen a framework that will facilitate optimal utilisation of the resource. With this guideline, if telecommunication companies want to trade, lease it or want to share it with another company; that is going to be allowed.
“The rules of engagement have been provided. Today’s public enquiry is to invite the buy-in of critical stakeholders in the telecom sector in the country to make further inputs that will culminate in the production of final guideline on spectrum trading, leasing and sharing.
“We are looking at two more weeks to make additional input and thereafter, the board will be given a chance to look at it and give approval. So all in all, we are looking at one month.”
At the public enquiry, some stakeholders kicked against the provision that an operator selling a spectrum should part with 60 per cent of the proceeds from a spectrum obtained through administrative procedure.
The NCC said spectrums obtained through administrative means could be much cheaper than those obtained through the process of auction. It promised to look into the protest but added that the provision was made to avoid operators from obtaining spectrums for speculative purposes.
Govt woos investors to telecoms sector with 30% cut at ITU 2018
The country was also present in this year’s International Telecommunications Union (ITU) held in Durban, South Africa. Investors coming into the telecommunications sector, have been guaranteed a 30 per cent cut in company income tax payment payable to the government.
Besides, there will be relaxation of monetary and fiscal policies; access to foreign exchange; reduction in waivers and Custom Duties and be opened to improved ease of doing business.
Executive Vice Chairman of the Umar Danbatta, NCC at the event said the plan was part of the Federal Government’s Economic and Recovery Growth Plan (EGRP) targeted at bringing in investors to the country.
Besides, Danbatta, who disclosed that so far, by the first and second quarters of 2018, contribution of the sector to GDP stood at nine per cent, which should hit 10 per cent by fourth quarter, said the sector added $5 billion to Foreign Direct Investment quarterly.
The Secretary-General, ITU, Houlin Zhao, in his speech, commended the level of ICT development in the country.
Zhao, who said he was specifically happy about the growth in 4G services in the country, described Nigeria as the biggest market for ICT in the region.
Marketing Nigeria’s ICT Opportunities, Startups at GITEX
Also within the year, Nigeria was the only African country that exhibited at the Gulf Information Technology Exhibition, GITEX Technology Week 2018 which held from October 14-18, at Dubai World Trade Centre in Dubai, United Arab Emirates, and was like a bride sought after by many suitors.
For Nigeria, its participation at the 38th edition of the GITEX Technology Week and Future Stars exhibition at Dubai created lasting impressions in the minds of visitors, delegates, exhibitors and the business community for years to come being the only African state with a country pavilion at Sheik Rashid Hall 1 reserved for national governments. Visitors desiring to do business in Africa especially Nigeria, trooped in to make enquiries about the opportunities and how they can partner and make inroads into the largest black nation on earth. On display were Nigeria’s large population and abundant market, tech savvy youthful population, quick return on investments and a growing yet untapped startups whose innovations are luring tech giants from Silicon Valley, USA. The National Information Technology Development Agency (NITDA), which regulates information technology development pitched eight Nigerian tech startups to global investors aimed at attracting investments to expand and become global companies in the future.
Broadband penetration hits 31%
Also within the year under review, the NCC says the country’s broadband penetration stood at 30.9 percent as at November 2018, surpassing the 30 per cent target by the National Broad Band Plan.
The Federal Government National Broadband Plan 2013-2018 set a target of 30 percent penetration to be achieved by end of 2018.
The Commission said it had exceeded the target it set for itself with over nine percent.
“At NCC, we knew we have to meet the broadband implementation plan to get to 30 per cent at the end of 2018 due to the work done, we now stand at 30.9 per cent equivalent of 31 per cent.
“NCC had issued license to seven infrastructure companies to deploy the needed infrastructure to facilitate the required penetration in the 774 Local Government Areas (LGAs) in Nigeria.
“This will enable penetration reach the served and underserved areas in the country.
“Active Voice Subscriber base grew from 165,239,443 in October 2018 to 169,104,830 in November 2018,” the NCC said.
According to the Commission, total active broadband subscription on 3G and 4G platforms as at November 2018 was 58,965,478.
“All information and progress on mobile, internet and data usage penetration would be sustained to provide the necessary requirements for increased investments and effective regulation of the telecom sector in Nigeria.”