By Dipo Olowookere
There are strong indications that Globacom, one of the four GSM service providers in Nigeria, may not be given the nod to acquire the troubled 9mobile, one of the mobile phone operators in the country.
9mobile, formerly Etisalat Nigeria, is desperately in need of a new investor after it was taken over in July 2017 following a N541 billion debt.
The telecoms firm obtained a syndicated loan from 13 Nigerian banks and after it failed its repayment plan, the lenders attempted to take over the company, but the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) prevented this.
After the regulators took over Etisalat Nigeria, Mubadala Group, the major investor from the United Arab Emirates, pulled out of the firm and said its brand name must not be used any longer, leading to the birth of 9mobile weeks later.
Barclays Africa, an arm of the Barclays Group, was appointed to shop for a new buyer of 9mobile and five companies have emerged the top bidders.
The firms are Bharti Airtel, an Indian telco that owns Airtel Nigeria; Globacom, the Nigerian company owned by Mike Adenuga Jnr; Teleology Holdings Limited, promoted by Adrian Wood, the pioneer CEO of MTN Nigeria; Smile Telecoms Holdings, a telco operating in Nigeria, Tanzania, Uganda, Congo DR and South Africa; and Helios Investment Partners LLP, an investment company.
According to a report by The Cable, Globacom desperately wants to acquire 9mobile, but it would take a miracle for this to happen.
This, according to the report, is because Glo does not have the financial muscle to revive 9mobile, which hopes to clear its debt with the banks.
“It is public knowledge that 9mobile is in dire need of real financial injection because of the debts, as well as a strong governance culture in view of its recent history.
“Glo is not the most financially buoyant to revive 9mobile, neither does it have the best-practice governance culture that 9mobile requires. Adenuga runs Glo like a kiosk or corner shop, and this cannot help the situation of 9mobile,” the insider was quoted as saying by TheCable.
However, it was gathered that Mr Adenuga desperately wants to acquire the telco and this is to claim the bragging rights of the largest telecom company in Nigeria.
Glo is currently the second largest operator in Nigeria with 37 million voice and 26.8 million internet subscribers, according to the October 2017 statistics from the NCC.
If it acquires 9mobile, it will automatically become the biggest network in Nigeria by adding 17 million to voice and 11.5 million to internet subscription base, he hopes.
Combined, the new entity’s 54 million voice lines and 38.3 million internet subscriptions will surpass MTN Nigeria’s 50.7 million and 32.5 million respectively.
“This, in sum, is why Adenuga wants 9mobile badly, despite the serious challenges Glo itself is facing in its business model,” the source said.
Glo would move from its 26.4% share of the market to 38.5%, including the benefit of recording more subscribers porting to its network.
Mr Adenuga’s company currently has the lowest number of gains from porting — an average of less than 1,000 per month — while 9mobile recorded a monthly average of 12,000 porting subscribers in 2017, industry’s highest by a distance, the journal reports.
Although the transaction is being handled by Barclays Africa, an arm of the Barclays Group, the telecom regulator, NCC, and the banking watchdog, CBN are expected to play a key role in the final decision.
NCC controls 9mobile’s operating licence while CBN regulates the banks. Both intervened to save 9mobile when it was going down.
The involvement of CBN and NCC, which had previously complained about “lack of transparency” by Barclays in the transaction, is not likely to do Mr Adenuga any favours.
However, Globacom remains confident that it would win the bid.
“Dr Mike Adenuga Jnr is never tired of pushing for improvement. Globacom boasts of arguably the most inspired and most passionate workforce in the industry.
We have the edge,” an insider told TheCable, refusing to be named because of internal rules.
Glo is the second national operator (SNO), licensed to provide national backbone for other networks as well as roll out landlines across the country.
“Since Adenuga got the SNO licence in 2003, he has not yet fulfilled the conditions of the licence. This is 14 years and counting,” a senior government official told TheCable on the condition that he would not be named.
“By now, it should have rolled out landlines nationwide and provided broadband access to millions of homes. The huge benefits to the economy have been lost over time. The notion that Globacom can get such an important licence and refuse to fulfill the conditions is unacceptable.”
Globacom was recently kicked out of the Republic of Benin after failing to meet conditions for the renewal of its licence, despite the fact that it took years for the company to roll out its service as a result of regulatory requirements.
The telecom company’s services in Ghana are also not well rated.
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