Globacom, others want NITEL

Numerous parties have indicated interest in acquiring the state-owned Nigerian Telecommunications Limited (NITEL) and its mobile arm M-TEL. The news emerged following the confirmation of the termination of the sale of both companies to Transcorp Plc.

According to Joseph Anichebe, the spokesperson for the Bureau for Public Enterprises, Mike Adenuga, the chief executive officer of Globacom, "led a team of investors who indicated interest in NITEL," at a forum organised by the government's privatisation agency in London in May.

Globacom is a composite telecommunications company with services covering fixed lines, international gateway services, and a mobile arm with more than 16 million subscribers. The company is widely recognised as a mobile telecoms player, but it is also one of two companies in Nigeria that holds a universal telecommunications licence for fixed lines, with the other company being NITEL. If Globacom's bid for NITEL is successful, it will effectively have a monopoly over fixed line services in Nigeria.

In a telephone interview on Monday, Mr. Anichebe said that other parties expressed an interest in NITEL. He said, "another notable group was led by Adrian Wood, the former MTN managing director in Nigeria." and he added that there were interests from "investors from Libya, India, Malaysia, and Russia."

The discussions in London in May occured amidst speculation in Nigeria that the federal government would take back NITEL from Transcorp, a conglomerate that currently has its two chief executives in the custody of the Economic and Financial Crimes Commission in Abuja on charges of fraud.

On Monday, the federal government announced that it had "terminated" the sale of the Nigerian Telecommunications Limited to Transcorp, citing Transcorp's inability to meet the terms of the contract.

Mr. Anichebe said that Transcorp "failed to meet the conditions stated in the contract of sale it entered into" with the privatisation agency, adding: "Yes, the government has terminated the contract signed by Transcorp.

"I won't say revoked because, it will imply that all conditions of the contract were met."

Mr. Anichebe mentioned two conditions in particular - that Transcorp was to have a technical partner for the management of NITEL but the arrangement with British Telecom fell through, and that "Transcorp was to inject ₦8.9billion within its first 100 days of assuming control of the company, and pay about 11 months arrears owed staff; but Transcorp failed to meet all these agreements."

Also on Monday, the National Council of Privatisation, which oversees the Bureau for Public Enterprises halted the sale of any NITEL asset and said it would create a "technical board" to manage the company until a new investor is found.

The Nigerian Telecommunications Limited, the former state telecoms monopoly, has deteriorated further since Transcorp paid $500 million in August 2006 for 51 per cent of holding in the company.

The Nigerian government first tried and failed to sell the ailing telecoms company in 2001. The preferred bidder then failed to pay up the $1.3 billion price before the stipulated deadline expired. Then came Orascom Telecoms of Egypt in late 2005.

Orascom, which had experience in countries with infrastructure problems, had its $256.5 million offer rejected because the government thought it was too low.

Nigerian Telecommunications Limited's huge debt portfolio and deteriorated infrastructure have contributed to the difficulty the government has faced with finding investors.

The number of NITEL fixed lines has declined to less than 100,000 from at least 500,000 in 2001, and MTEL, the company's mobile arm, has seen its subscriber-base drop to a few hundred thousand from 1.3 million since Transcorp took over in 2006.