BREAKING NEWS, Business
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The NATCOM Development and Investment Limited, owner of the Nigerian Telecommunications Limited and Mobile Telecommunications, invests $1 billion to revive the companies which will roll out mobile lines in March
| By Anayo Ezugwu | Feb 1, 2016 @ 01:00 GMT |
THE NATCOM Development and Investment Limited, owner of Nigerian Telecommunication Limited, NITEL and Mobile Telecommunication Limited, MTEL, is set to roll out its mobile lines and 4G/LTE services for broadband users in March this year. The company has spent more than $1 billion to revive the beleaguered national carrier.
Olatunde Ayeni, chairman of NATCOM, said the funds and other efforts would see the company engage 4,000 employees by March. He told the House of Representatives Joint Committees on Communication and Privatisation, that his company would begin a phased rollout from Abuja, Lagos and Port Harcourt before expanding to other parts of the country.
He disclosed that the initial financial bid was increased to $252 million from $221 million when juxtaposed with the liquidator’s reserved price of $256 million. NATCOM acquired assets and licences of NITEL and MTEL, percentage interest held in South-Atlantic 3 (SAT-3) consortium, and identifiable assets capable of generating viable business units.
NATCOM’s full submission was duly made to NITEL/MTEL’s liquidator and Nigeria’s Bureau of Public Enterprises on November 7, 2014. NATCOM’s submission was accompanied by a bid bond in the amount of $10 million as stipulated in the liquidator’s RFP.
According to Ayeni, $10 million had been spent on SAT-3 system, quarterly dues to the consortium’s system expansion and upgrade since the acquisition, adding that the Nigerian Communications Commission, NCC, had assigned another set of microwave frequency ranges to NATCOM upon request for N176.8 million, computed on the basis of 800 bases station network in the first instance.
Ayeni said NATCOM was requested to pay an additional N6.6 billion to bridge the shortfall of the value of the Naira to the Dollar from N168 to N197, after the payment of the first instalment of 30 percent of the bid price within 14 days of approval by the National Council on Privatisation, NCP, and balance within the 90 days.
This is not the first time the federal government privatised or attempted to privatise NITEL. In 2001, the Investors International of London Limited, IILL, emerged the preferred bidder of NITEL. IILL bid $1.317 billion to acquire 51 percent stake in NITEL and MTEL on November 28, 2001. It proceeded to pay a 10 percent deposit of the bid sum amounting to $131.7 million to the BPE. However, it could not complete the payment of the sum when it was due in February 2002. This prompted the federal government to forfeit the $131.7 million deposit.
In 2003, Pentascope, a Dutch firm, took over NITEL and the company generated N51.43 billion as revenue in one year from 555,055 connected lines. But 23 months after the takeover, the connected lines dropped to 440,000 and the firm incurred a debt of more than N40 billion. The federal government’s deal with Pentascope was later revoked.
In 2005, Orascom, an Egyptian telecoms giant, also failed to buy the company because its $257 million bid was below the price of NITEL. The takeover of NITEL by Transcorp in 2006 was celebrated in the country but the excitement was short-lived after the $500 million deal failed to turn around the fortunes of the company. Also, the last attempt to sell the company to New Generation Telecommunication Consortium of China at the price of $2.5 billion for 75 percent stake in NITEL/MTEL was terminated due to failure of the Chinese consortium to pay the bid price. With the pace NATCOM is moving, only time will tell if the consortium would turnaround the fortunes of NITEL and MTEL.
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