Displaying items by tag: Nigeria

UAE telecom operator Etisalat’s former Nigerian operation, rebranded as 9mobile, will be purchased for $500 million by investment firm Teleology Holdings. An auction was held for the troubled operator, which became a new brand in the Nigerian telecom market in mid-2017 after Etisalat pulled out of the country.

The auction for 9mobile was supervised by Barclays Africa, which picked the highest bidder after four companies were shortlisted. Pan-African telecoms group Smile made a bid for $300 million and is said to be the reserve bidder. Nigerian operator Globacom also made a bid for an undisclosed amount, as did Helios Investment Partners.

Both Teleology Holdings and Smile have thirty days to prove they have the financial resources to pay for 9mobile. It was reported that Airtel Nigeria pulled out of the auction to purchase the operator because “too many things are hidden about the health of 9mobile”.

One area of concern is that two weeks ago, a Lagos high court in Nigeria ordered the board of 9mobile’s parent company, Emerging Markets Telecommunications Service (EMTS), to disband, after a judge claimed it had been established without authority.

The court's decision was made after Spectrum Wireless Communication, a company that invested $35 million in EMTS in 2009, claimed the board's approval was not in line with its interests and called for its contributions to the operator to be recognized. Now, United Capital Trustees, which is handling the sale of 9mobile, is appealing the court order.

The sale of 9mobile was entrusted to United Capital Trustees after it defaulted on repayments of a $1.2 billion load that was given to it by multiple banks. The Central Bank of Nigeria and the Nigerian Communications Commission (NCC) supported the EMTS board, and had received bids from five parties for the sale of 9mobile.

The sale of 9mobile was extended in early January 2018 by the NCC to January 16 after the original closing date passed with no final decision. Reports speculated that the decision would be further delayed after a Spectrum Wireless Communication solicitor said anyone "who transacts business for the purpose of sale or acquisition of EMTS or 9mobile does so at his own risk."

9mobile became a new brand in the Nigerian telecom market in mid-2017 after its previous owner, Etisalat, and an investment fund, defaulted on a $1.2 billion loan. The operator, formerly known as Etisalat Nigeria, was saved by regulators. 9mobile is currently the fourth largest operator in Nigeria.

Published in Finance

9mobile’s parent company hit with Nigerian court order

Written on Tuesday, 23 January 2018 08:29

Nigerian telecom operator 9mobile, formerly Etisalat Nigeria, is facing turbulent times. A Lagos high court in Nigeria ordered the board of the operator’s parent company, Emerging Markets Telecommunications Service (EMTS), to disband, after a judge claimed it had been established without authority.

The court’s decision was made after Spectrum Wireless Communication, a company that invested $35 million in EMTS in 2009, claimed the board’s approval was not in line with its interests and called for its contributions to the operator to be recognized. Now, United Capital Trustees, which is handling the sale of 9mobile, is appealing the court order.

The sale of 9mobile was entrusted to United Capital Trustees after it defaulted on repayments of a $1.2 billion load that was given to it by multiple banks. The Central Bank of Nigeria and the Nigerian Communications Commission (NCC) supported the EMTS board, and had received bids from five parties for the sale of 9mobile.

The sale of 9mobile was extended in early January 2018 by the NCC to January 16 after the original closing date passed with no final decision. Reports speculate that the decision will likely be further delayed after a Spectrum Wireless Communication solicitor said anyone “who transacts business for the purpose of sale or acquisition of EMTS or 9mobile does so at her own risk.”

9mobile became a new brand in the Nigerian telecom market in mid-2017 after its previous owner, UAE telecom company Etisalat, and an investment fund, defaulted on a $1.2 billion loan. The operator, formerly known as Etisalat Nigeria, was saved by regulators. 9mobile is currently the fourth largest operator in Nigeria.

Published in Telecom Operators

MTN, Airtel among 16 firms lining up to purchase 9mobile

Written on Wednesday, 25 October 2017 13:18

The acquisition of 9mobile, formerly Etisalat Nigeria, looks to be competitive, as 16 firms have submitted their interest to bid for the operator. Etisalat Group was forced to pull out of Nigeria this year after its firm couldn’t come to an agreement with its lenders to restructure $1.2 billion debt after missed payments. Following Etisalat’s exit, the Nigerian firm announced it had rebranded as 9mobile and said it is open to discussions with new investors. 

The 16 companies to express their interest in purchasing the Nigerian operator include South Africa’s MTN, India’s Bharti Airtel, and Nigeria’s ntel, which in 2015 acquired the assets of the defunct NITEL and MTel through the federal government’s privatization program. Africacell, a holding company with cellular communications companies in DRC, Gambia, Uganda and Sierra Leone, also submitted its interest in purchasing 9mobile, according to a report by ThisDay.

The report said industry sources confirmed that the 16 companies had complied with the deadline for the submission of Expressions of Interest (EoIs) at Barclays’ office in Lagos. The CEO of 9mobile, Boye Olusanya, said he is focused on getting the company back on track to make profit. 9mobile has about a 13 percent share in Nigeria’s mobile market, according to GSMA Intelligence, behind MTN, Glo Mobile and Airtel.

Published in Telecom Operators

Virgin Mobile, Vodacom and Bua Group are among companies potentially interested in buying 9mobile, formerly Etisalat Nigeria, according to a report by ThisDay. 9mobile recently rebranded after the UAE’s Etisalat terminated its management agreement with its Nigerian unit, giving up its 45 percent stake to a trustee.

Etisalat pulled out of Nigeria after its firm couldn’t come to an agreement with its lenders to restructure its $1.2 billion debt after it missed payments. Following Etisalat’s exit, the Nigerian firm announced it had rebranded as 9mobile and said it is open to discussions with new investors.

According to the report, Virgin Mobile, Vodacom and Bua Group, a local diversified business with a stake in various sectors, all plan to submit their memoranda of interest and technical presentations to a consortium of banks which have appointed advisers to evaluate acquisition bids.

Virgin Mobile is said to be willing to absorb the balance of the $1.2 billion debt 9mobile owes to 13 financial institutions, and stands out as the likely winner. Virgin’s chances are also high because of Vodacom’s rivalry with South Africa’s MTN over the years, therefore several former MTN Nigeria executives are backing Virgin’s potential bid.

If Virgin successfully takes control of 9mobile, it will reportedly execute a development strategy in which every cell site will be upgraded to 3G or 4G. The move could be extremely beneficial for a nation that has mostly 2G cell sites.

9mobile has about a 13 percent share of Nigeria’s mobile market, according to GSMA Intelligence, behind MTN, Glo Mobile and Airtel.

Published in Telecom Operators

Nigeria’s central bank said on Friday, June 23, that Abu Dhabi state investment fund, Mubadala, had pulled out of Etisalat Nigeria, following a failed attempt by the telecom operator to renegotiate a $1.2 billion loan taken out four years ago with 12 Nigerian banks.

The loan Etisalat Nigeria received was to refinance a $650 million loan and fund expansion of the operator’s network. Payments to the loan were missed because of sharp declines in the Nigerian naira which increased the loan’s value, making repayments more difficult than anticipated.

Etisalat reportedly “pulled out” and intervened in the loan renegotiation talks to prevent job losses and asset stripping. $500 million of Etisalat Nigeria’s loan had been paid off before it defaulted in February. The company’s only remaining investors include its Nigerian partners, led by Etisalat Nigeria’s chairman Hakeem Belo-Osagie.

The parent company of Etisalat Nigeria, UAE-based Etisalat Group, said it was carrying its 45 percent stake at zero value, and that the Nigerian lenders had insisted it transfer its shares to a loan trustee by June 23 after the renegotiation failed, according to Reuters.

The Nigerian central bank said, “Given the inability of Etisalat [Nigeria] to come to an acceptable agreement with the banks, the largest shareholder in the company, Dubai-based Mubadala Development Company of the United Arab Emirates, has now pulled out of the company as well as the ongoing negotiations.”

The bank added, “It was based on the attempt of the banks to take over the company that the financial and telecommunications regulators have moved in to intervene and forestall down-sizing and asset striping.”

There were attempts in March by the Nigeria Communications Commission (NCC) and the central bank (which also acts as the banking watchdog) to prevent lenders placing Etisalat Nigeria in receivership to avoid a larger debt crisis, and agreed with banks to pursue a default deal. However, feeling the pressure to avoid loan-loss provisions, lenders have been pushing to finalize a restructuring before half-yearly audits come up soon.

Representatives from the Nigerian central bank and the communications regulator will soon hold discussions, according to central bank spokesperson, Isaac Okorafor, with lenders and IHS Towers, the mobile phone tower managers, and also “equipment suppliers”.

Etisalat Nigeria currently stands as the country’s fourth largest mobile operator with 14 percent market share, after South Africa’s MTN which has 47 percent market share, Globacom which has 20 percent, and Airtel – a subsidiary of India’s Bharti Airtel – which has 19 percent.

Published in Telecom Operators

South African telecoms giant MTN reported its first loss recently blaming the huge fine it was given in Nigeria and also currency challenges in key markets. In a statement the company said, "MTN Group's financial results for 2016 reflect the most challenging year in the company's 22-year history."

The Johannesburg-based telco reported profits of 20.2 billion rand ($1.6 billion) before tax. MTN's performance was greatly affected by lower than expected growth in South Africa and Nigeria, as well as the depreciation of the rand against the dollar and the continued impact of the $1 billion fine MTN was given by Nigerian authorities.

MTN was fined by Nigeria in October 2015 for failing to disconnect unregistered mobile accounts in the country linked to terrorist groups. The company was ordered to pay $1,000 for each improperly registered SIM card. Nigeria had ordered the purge for security reasons as the nation struggles to control terrorist activity.

The original Nigerian Communications Commission penalty was equal to about a quarter of the country's annual federal budget.

Nigeria is Africa's most populous country and is also MTN's largest market, where it now has 62 million subscribers out of a total of 233 million - a 1.2 percent increase on 2015. The company's operations in South Africa were hit by technical issues and customer service problems during the year, which also hurt the bottom line, according to MTN.

"Towards the end of 2016 our two largest operations (South Africa and Nigeria)… began to show signs of a turnaround following an extended period of underperformance," said the company in a release, adding that revenue was slightly up for the year at 146.9 billion rand ($11.3 billion).

Published in Finance

MTN announces new CEO after settling dispute with Nigeria

Written on Wednesday, 22 June 2016 05:27

South Africa’s MTN named a new chief executive on Monday, June 20, after resolving a dispute with Nigeria over a huge fine for failing to disconnect millions of unregistered mobile phone lines with ties to terrorism.

MTN announced that Rob Shuter, a South African who is currently the Vodafone Europe CEO, will take over as its new group president and CEO next year. MTN is currently Africa's biggest wireless operator and said in a statement that "following the successful resolution of the Nigerian dispute, it has completed the review of its governance and management structures."

The Johannesburg-based company was last year hit with a $3.9 billion fine for failing to cut off 5.1 million unregistered SIM cards, amid fears that some of the affected lines were being used by Boko Haram insurgents. The conflict sparked by the Islamic extremist group has left at least 17,000 dead and forced more than 2.6 million people from their homes since 2009.

On June 10, MTN announced that following negotiations with the Nigerian authorities, it had agreed to pay $1.7 billion as a final settlement.

Shuter will take over from executive chairman Phuthuma Nhleko, who stepped in last November in the thick of the Nigerian fine debacle. Nhleko will revert to his post as non-executive chairman when Shuter takes over.

"MTN has weathered a rather difficult storm and will continue to review its governance and management operating structure to ensure that it operates at an optimum level and continues to replenish management talent to ensure a sustained growth of the business," said Nhleko.

He added: "I am confident that with the calibre of Rob Shuter as CEO, the group will resume its path to playing its rightful role in increasing connectivity and accelerating convergence across Africa and the Middle East."

Published in Telecom Operators

Facebook, the social network hub, has officially launched its Free Basics service in Nigeria, the most populous country in the African continent and also the largest market. The Free Basics platform was launched in collaboration with Indian Telco Airtel, the third largest telecom operator in Africa with almost 34 million subscribers. Free Basics allows users to access listed websites free of charge.

The platform is part of Facebook’s Internet.org initiative, aiming to provide efficient Internet access to two-thirds of the world without access to the Internet. According to Facebook, the initiative has helped connect 25 million people access the Internet across the globe so far. Despite increasing smartphone adoption, in Nigeria, the high price of data has made the Internet inaccessible to most people in the past.

Of course, the Free Basics initiative isn’t without its criticism. Some have accused the free service of providing a “walled garden” version of the Internet; in other words, only allowing users access to a select group of websites on the service. Facebook responded to the criticism by allowing access to more websites that meet “technical specifications”.

Across Africa, the Free Basics service has reportedly been very successful and welcomed openly In Tanzania, a country with only 5 percent Internet penetration. Tanzania’s country regulator said the service was beneficial to the market, by increasing the possibility of increased adoption of data services. However, in India, the service was effectively banned earlier this year, facing stiff competition from national regulators.

With the introduction of Free Basics in Nigeria, Facebook reportedly plans to work with developers in the country who can build websites with local content which will subsequently improve the platform’s relevance to locals. The platform already hosts Jobberman, Nigeria’s largest jobs portal, making it easier for Nigerians to apply for positions online.

Facebook CEO, Mark Zuckerberg, said in a post that he was eager to offer “the opportunity to access news, health information and services like Jobberman that were built by Nigerians” without having to pay for it.

Ultimately, the platform has been thoroughly welcomed in the country, but there is still a long way to go before Internet penetration reaches reasonable levels in Africa, seeing as, of the 21 African countries where Free Basics has launched, only Seychelles has an Internet penetration rate above 50 percent.

Published in Telecom Vendors