12022018 - Fuel crisis : PDP, APC in verbal war over President's role

FINANCIAL VANGUARD
Vanguard, MONDAY, FEBRUARY 12, 2018 — 25
Special Report
Continued from page 26
for 9mobile.
Criteria for 9mobile’s preferred
bidder
Meanwhile, several stakeholders in
the telecom sector have cautioned
against relying on the size of the
financial bid as the sole criterion in
closing the 9Mobile sale.
For them, some other factors include
contribution to the growth and
development of Nigeria’s
telecommunications sector, technology
innovation, human capital development
and employment opportunities to
Nigerians should be highly considered.
Other factors they felt should not be
ignored are local knowledge and direct
financial contribution to the economy in
terms of payment of taxes and levies,
among others.
A telecom analyst, Mr James Imo,
told Financial Vanguard that
delaying the sale of 9mobile will devalue
the company further and put the
eventual buyer into great debt. He
admitted that while it may not be easy
to sell the company due to several
litigations, among which is the one
instituted by Spectrum Wireless, the two
regulators, NCC and CBN should make
effort to call Spectrum Wireless and
other aggrieved parties to a round table
to ensure 9mobile does not end up like
NITEL.
He also advocated for urgent reappraisal
of the two finalists out of the
16 companies that started the race for
the acquisition of 9Mobile, to ensure
that the best emerged winner at the end
of the process.
A look at the remaining contenders
There were three final contenders
bidding to buy 9mobile before the New
Year. However, it appears Globacom
eventually dropped off the radar.
Although, a reliable source at the
second national carrier, told Financial
Vanguard that Globacom did not
withdraw from the bid and has not been
informed why it is no more considered
part of the bidding process, it is
however, public knowledge that only
two, Teleology and Smile, remain the
final bidders.
Teleology Holdings Limited
Teleology Holdings Limited is a
consortium of companies, with eminent
Nigerians, including frontline
politicians, revered traditional rulers
and notable business executives as
shareholders. The company is
promoted by Adrian Wood, an
international technology and investment
How 9mobile acquisition delay triggered
N5.5bn revenue loss
executive. He is currently the Chief
Executive Officer of Brymedia West
Africa Limited.
He has served as Chief Executive
Officer of MTN Nigeria and Group
Managing Director of Daily Times
Nigeria. His career spans major
operators such as Telstra, Portugal
Telecom, Telecom Finland-Sonera,
France Telecom, Orange UK, Telenor.
Wood’s expertise extends to complex,
geographical and culturally diverse
businesses, brand development, growth
in a regulated environment, capacity
building, government and community
relations.
Smile Telecoms Holdings Limited
A Mauritius-based Pan-African
telecommunications group, with
operations in Nigeria, Tanzania,
Incidentally,
different interests,
litigations, more debt
claims among other
bottlenecks, appear to
be keeping the sale
process in limbo
Uganda and Democratic Republic of
Congo, Smile has the largest sub-1 GHz
4G LTE commercial network in Africa,
operating in the 800 MHz band,
providing broadband services to its
customers.
Smile launched commercial 4G LTE
network in Dar es Salaam, Tanzania in
May 2013 and June the same year, in
Uganda. It has extended its coverage
in Tanzania to 7 regions and 14 cities in
Uganda.
In March 2014, Smile launched its first
West-Africa’s 4G LTE mobile broadband
service in Nigeria with coverage now
extended to eight cities.
Smile Nigeria has a top drawer board
headed by the consummate investor, Dr.
Ernest Azudialu-Obiejesi.
The company has Ahmad Farroukh as
the Executive Director, Operations.
Farroukh, who recently served as the
rescue CEO of Mobily, Saudi Arabia’s
second largest telecommunications
operator, was also the CEO of MTN
Nigeria from 2006 to 2011. He is an
experienced telecoms executive with a
distinguished record of commercial
success, extensive experience working
in Nigeria and Africa and has an
impressive ability to drive strategy and
profitability in accordance with
international standards.
History of 9mobile
9mobile began as Emerging Markets
Telecommunications Services, EMTS,
which first traded as Etisalat Nigeria.
Duly incorporated under the laws of
Nigeria in partnership with Mubadala
Development Company and Etisalat of
the United Arab Emirates, it acquired
the Unified Access Licence from the
Federal Government in January 2007.
The licence includes a mobile licence
and spectrum in the GSM 1800 and 900
MHz bands.
The telecom company made the first
official call on its network on March 13,
2008 in the presence of officials from
the Nigerian Communications
Commission and the Senate. In
September of same year, it kicked off
commercial operations with the
0809uchoose campaign which enabled
Nigerians choose numbers special to
them as their mobile numbers.
Network rehabilitation
In April 2013, the company announced
it would invest over $500 million to
expand its network, enabling further
potential market growth of 17 per cent
and went ahead to obtain a medium term
loan of $1.2bn from a consortium of 13
banks, which it used to refinance an
existing $650 million loan and fund a
modernisation of its network. The loan,
which involved a foreign-backed
guaranty bond, was for it to finance a
major network rehabilitation and
expansion of its operational base in
Nigeria.
However, since 2016, the consortium
of banks has been having a running
battle with the mobile telephone
operator over repayment of the loan
facility. Although the company said it
consistently serviced the debt until it
began to experience cash flow problems
following the steep depreciation of the
naira and the impact on its foreign
currency denominated exposure..
How Etisalat left
Following breakdown in negotiations,
the company’s two foreign investors,
Emirates Telecommunications Service
and Mubadala withdrew their interest
in the concern, compounding the
problems of EMTS.
Chief Executive of Etisalat
International, Hatem Dowidar, while
announcing the withdrawal at Abu
Dhabi Stock Exchange, gave Etisalat
Nigeria just three weeks to use the
brand name and phase it out completely.
Its technical partners, Mubadala, also
followed suit, leading to a massive
resignation of top executives of Etisalat
Nigeria and the chairman of the board.
Regulatory interventions
At that point, it appeared a takeover
was most likely but the intervention of
Nigerian telecom and banking
regulators, the Nigerian
Communications Commission and the
Central Bank of Nigeria, saved Etisalat
Nigeria from being taken over by a
consortium of Nigerian and foreign
banks.
The two regulators persuaded the
banks to rethink their threat and give
Etisalat a chance to renegotiate the
loan’s repayment schedule. Further
negotiations brought about a new board
comprising of appointees of the
consortium, the telecommunications
company and the regulators and
subsequently a new name 9Mobile.
However, having seen that a new
board and name change were not all it
required to settle the loan which has
been the heart of the matter, the
regulators, the consortium, represented
by its financial adviser, Backlays Africa
and the board, agreed to put the telecom
company for sale.
Incidentally, different interests,
litigations, more debt claims among
other bottlenecks, appear to be keeping
the sale process in limbo.