Originally Posted by Babs_O
Ex-MTN Top Guns Launch Bid for NITEL
By Shina Badaru, 07.17.2008
A consortium promoted by ex-MTN Nigeria top executives has launched a bid for stakes to be unbundled by Transnational Corporation (Transcorp) in Nigeria's pioneer national operator, the Nigeria Telecomm-unications Limited (NITEL).
In a report made available exclusively to THISDAY by Technology Times, the former CEO, MTN Nigeria, Adrian Wood, is said to be leading a consortium comprising two of his former colleagues, former Chief Marketing Officer, MTN Nigeria, Afam Edozie, and ex-Chief Technical Officer, Demola Eleso.
They are teaming up with other investors from diverse parts of the country to pitch for NITEL through an investment vehicle that may have 60 per cent local shareholding.
The Australian-born Wood, who succeeded Karel Piennar to become the second chief executive of the mobile phone company owned by South African MTN Group, was reputed to have grown its market performance before quitting the company.
But a titanic battle appears under way as UK's Vodafone has also expressed interest while South Africa's mobile phone company, Vodacom SA, also sees NITEL as an alternative entry strategy into Nigeria after a botched deal to acquire stakes in mobile phone company, Celtel Nigeria.
Also, India's largest telecoms company, Bharti Airtel, is speculated to be interested in the NITEL stakes.
It is understood that the consortium, said to be backed by four undisclosed international investors boasting a portfolio of over $40 billion, looks set for battle with these other major telecoms company with eyes set on entering the highly profitable Nigerian telecoms market through acquisition of NITEL.
The Federal Government and Transcorp had in February reached a deal to unbundle their shareholding in the telecoms company when government felt that the latter could not turn around the fortunes of NITEL in line with the privatisation vision of government.
Transcorp had originally in 2006 launched a bid for 75 per cent shareholding in NITEL and its mobile business unit, Mtel, including the bundled SAT-3, the Nigeria end of the optical fibre transmission link.
It was offered the package at $750 million during the privatisation sale undertaken by the Bureau of Public Enterprises (BPE).
In a series of events that was to trail the sale, initial signals of challenge to the turnaround plan were to emerge when Transcorp could only raise $500 million to settle for 51 per cent stakes of the bundled offer with government retaining 49 per cent.
Following the flailing fortune of NITEL, after Transcorp acquired controlling stakes in the telecoms company, both parties resolved it was necessary to bring in a new core investor with, "requisite focus, technical expertise, managerial experience and financial capacity to take controlling shares in NITEL/M-TEL".
Under the deal, in which both parties say they have agreed to relinquish enough shares to give comfort to a new core investor "in the best interest of the industry, stakeholders and the Nigerian people", Transcorp will cede 29 per cent of its current shareholding while government will concede 22 per cent of its share to give the new core investor 51 per cent.
A source in the know, who is also sympathetic towards the ex-MTNers' current foray into the Nigerian telecoms market, said last night that as a "deal breaker", the group had secured interest of two undisclosed major telecoms company but its pitching its case on the fact that competence and capacity exist locally to turn around the fortune of the ailing NITEL.
The source said: "The foreigner mentality has been created by those who cannot recognise competence within Nigeria."
According to him, the group reckons that salvation for NITEL is to be found within Nigeria as previous attempts by foreign entities including BT and Pentascope of Netherlands that have been contracted to turn around NITEL have so far failed to yield result.
"An international telco will want to introduce its own style rather than build up Nitel's style; an overseas telco will spend 12 months trying to understand the company and the environment before being able to move," he said, underscoring that what the former monopoly that now operates within a competitive market needs is a good blend of "competent management, technical and commercial team".
Giving an insight into the broad strategy of the ex-MTNers without providing specific details, he added: "NITEL is no longer a monopoly. It is now operating in a competitive market. It requires an understanding of the opportunities still left in the Nigerian telco space, the competition, the customers and the market environment; international telcos have none of this."
To underscore his stance, he said Econet (now Celtel Nigeria), which was in the early years of the mobile GSM explosion the number one operator by subscriber base and Glo mobile, which today is ranked number two, even after coming two years late into the mobile sector,"succeeded without real overseas telco experience".
Comment:
At this rate may be Transcorp will retain Nitel and deliver the billions from it.
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3rd July 2008, 10:09 AM
Lets See The Numbers Please
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