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24–Vanguard, MONDAY, FEBRUARY 12, 2018
FINANCIAL VANGUARD
How 9mobile acquisition delay triggered
N5.5bn revenue loss
•Teleology, Smile telecom rumoured as preferred, reserved bidders
•NCC warns on speculative reports, says no winners yet
Emefiele, CBN Governor
By Prince Osuagwu
(Hi-Tech Editor)
NIGERIA’s fourth telecom
operator, 9mobile, has
suffered a loss in market share
estimated at N5.5 billion in six
months, occasioned by the
confusion and delay in the sale
of the company.
The telecom company which
prides itself as the most
innovative, having tailored its
services towards the growing
army of Nigerian youths, has
become hard to sell since the
$1.2billion loan from a
consortium of 13 foreign and
local banks forced it to succumb
to acquisition.
The mobile operator attracted
over 16 bidders which have
been narrowed down to two,
Teleology and Smile
technologies. Yet, a clear
winner has not emerged.
Meanwhile, as at the time of
writing this report, it is highly
difficult to clearly say who is
the preferred or reserved
bidder in the sale process for
a company the Nigerian
Communications Commission,
NCC, promised would have a
new owner by the end of
December 2017.
Market share and revenue
loss
Meanwhile, the operator is
losing ground in both voice
subscriber base and internet
users.
Financial Vanguard analysis
of NCC’s Monthly Internet
Subscribers data for December
2017, showed that 9mobile lost
68,341 internet users while
competitors like MTN, Airtel
and Globacom gained
2,642.666; 911,040 and 87,538
respectively.
While their gains took them
to 36,069,597; 23,985.203 and
26,997,817 internet
subscriptions respectively,
9mobile’s loss reduced its
internet users to 11,338.839 as
against 11,407,180 in
November same year.
Worse is the rate at which the
company loses market share
and subscriber base.
Furthermore, data from NCC
showed that, the once
innovative company that
boasted of over 21million
subscribers is now has between
16 and 17 million subscribers,
indicating decline of about four
million subscribers in just six
months.
N5.5billion lost
Using the last Average
Revenue Per User (ARPU),
statistics from NCC, 9mobile
may have lost approximately
N5.5billion in those four million
subscribers.
ARPU, refers to the financial
performance benchmark in the
Danbatta, Executive Vice
Chairman/CEO, NCC
telecoms industry that
measures the average monthly
spending on each SIM card.
The commission, in 2016,
recorded that average monthly
revenue generated by
operators from each telecom
subscriber, is estimated at
around $4.5 (N1,372) with the
official exchange rate currently
The once
innovative
company that
boasted of over
21million
subscribers is now
having between 16
and 17 million
subscribers,
indicating decline
of about 4 million
subscribers in just
six months
at N305 to the dollar.
Going by that figure, the
telecom company may have
lost well over N5bn, in addition
to the huge revenue it must
have also lost in dropping
68,341 internet users in
December.
Teleology vs Smile
Technologies
Although it was rumoured,
last week, that Teleology, a
company run by former MTN
CEO, Adrian Wood acquired
the network for $500m, the
supposed reserved bidder,
Smile Technologies was also, at
the same time, flaunting
statistics that positioned it as a
potential winner, creating
confusion as regards the real
state of the sale process.
Meanwhile, Spectrum
Wireless, a company claiming
to have lent 9Mobile $35m
when it commenced operations
in Nigeria, has also warned
that anybody buying 9Mobile
from the present board will be
doing so illegally, as the board
allegedly lost its locus standi
when the court dissolved it last
month. The company said until
its $35m is paid back and a new
board constituted, buying
9Mobile will be a deliberate act
of illegality.
Working in fear
This has not only caused
anxiety among the staff of the
telecom company but has also
created panic in the whole
telecom industry.
A staff of the company, who
Special Report
spoke to Financial
Vanguard on condition of
anonymity, confessed that there
is palpable fear among
workers. “We are confused. In
fact we are praying that this
scenario ends quickly so we can
know our fate. We come to work
these days not knowing what
will happen. Working in fear is
not the best for any
organisation and you can see
the effect in the way subscribers
lose interest in our offerings.”
The source told Financial
Vanguard that one of the
hindrances to smooth sale of the
company is that people in the
board are allegedly
representing different
interests. He appealed to the
regulator to ensure
transparency in the bid
process.
NCC warns
Meanwhile, NCC has
warned the public against
relying on speculative reports
on the process of 9mobile sale.
The Commission said that
several reports that did not tally
with the process have been
making the rounds in the past
few weeks. It advised that until
official statements which will
involve the two regulators, the
NCC and the Central Bank of
Nigeria, CBN, is out, every
other information on the sale
of 9mobile should be taken
with a pinch of salt.
Executive Commissioner,
Stakeholders’ Management of
the Commission, Mr Sunday
Dare, told Financial
Vanguard that although the
interim board of 9mobile is in
charge of the bid process, it
would submit reports to
Barclays Africa, the financial
adviser handling the sale of the
telecoms company, NCC and
CBN before any authentic
announcement is made.
Reserved
bidder
Dare said that the NCC was
yet to receive any report
indicating conclusion of the bid
process and therefore any
claim of preferred or reserved
bidder could not be relied
upon.
He however stated that all
the stakeholders involved in the
9mobile sale, considered the
interest of investors,
subscribers, and over 2,000
employees of 9mobile as
driving factor to a seamless and
transparent process.
He expressed confidence in
the board to maintain
transparent handling of the
telecom company’s sale
process knowing that any
shade of opaque handling of
the process will create a
dangerous ripple effect on the
entire telecom sector.
He was reacting to the
rumour that the interim board
of 9mobile may have finally
settled for Teleology Holdings
Limited as the preferred bidder
Continues on page 27