News that a consortium has acquired Nigeria Telecommunications Limited (NITEL) and its subsidiary, Mtel, is received with mixed feelings. Some analysts suspect it is business as usual, others see light at the end of the tunnel for the moribund first national carrier.
Those optimistic think the involvement of Skye Bank Chairman, Tunde Ayeni, in the acquisition portends a successful turnaround of NITEL to challenge the big players to the benefit of subscribers.
They expressed their views after the announcement by the National Council on Privatisation (NCP) on Wednesday, December 3 that NATCOM Telecommunications – a consortium run by Ayeni; founder of Sahara Energy Resources, Tonye Cole; and two other companies – received approval to take over NITEL and Mtel once it pays $242.3 million (N42.4 billion).
The components of NATCOM, the sole bidder, include NATSPACE Telecommunication Investment, PCCW Global, Prime Union Investment, Olutoyi Estate Development and Services, Legal Resources Alliance, Sahara Energy Resources, and LM Ericsson Nigeria.
The Ayeni pedigree
Ayeni led NATCOM in the acquisition less than two months after he led Skye Bank to buy Mainstreet Bank from the Assets Management Company of Nigeria (AMCON) for N120 billion
A year ago, he was the chief promoter of Integrated Energy Distribution and Marketing Company which acquired Ibadan and Yola Distribution Companies (Discos) under the power sector reform.
“I am happy to announce that the revised bid has met the reserve price” for NITEL and Mtel, said Haruna Sambo, NCP Vice Chairman.
Two bidders had been prequalified by the Bureau of Public Enterprises (BPE) to participate in the sale, but were later disqualified for failing to include a $10 million bid bond stipulated in the Request for Proposals (RFP).
We wait and see, says Agbakoba
In his reaction to the sale, legal luminary and maritime expert, Olisa Agbakoba, said the successful bid is good news but fingers are crossed to see how NATCOM revives the brand.
“Recently we allegedly successfully unbundled the power sector and we are yet to see the necessary result,” Agbakoba noted.
But Sambo explained that the NCP adopted the strategy after considering all options and in the light of the previous failed attempts to privatise NITEL, besides its huge liabilities of over N300 billion.
BPE Director General, Benjamin Dikki, listed the troubles of NITEL to include unpaid staff salaries, unpaid benefits to former employees, outsourced security personnel, and unpaid licence fees to the Nigerian Communications Commission (NCC).
But he said the BPE was able to overcome the challenges with the support of the government.
Communications Technology Minister, Omobola Johnson, said the sale of NITEL was the last segment in the well thought-out reform of the telecommunications sector, which began in 2000.
She gave an assurance that Abuja will continue to review policies to provide an enabling environment for the growth of a private sector driven telecommunication industry.
Is NATCOM up to the task?
But some analysts expressed doubt over the ability of NATCOM to run a successful telecommunication firm amid stiff competition from MTN, Glo, Airtel, Etisalat, and others.
A telecommunication expert in Lagos countered that talk of NATCOM lacking the skill to compete is irrelevant as “Glo with little or no industry knowledge has been able to break the jinx.”
Agbakoba insisted that if Ayeni’s expertise in other sectors is fully utilised, other telecom players should be on the look out.
However, other stakeholders said NATCOM may have difficulties because what it wants to pay $252.25 million for is just the asset, not telecommunication infrastructure which NITEL does not have.
Nicon Hilton Hotel and other government enterprises have not flourished after acquisition by private investors.
