One of Nigeria’s foremost telecommunications service providers, MTN Nigeria, is now expanding its capital base and repositioning itself preparatory to tackling head-on, the expected breakneck competition which the recent acquisition by India’s Bharti of Zain Group’s Africa holdings will pose.
MTN Nigeria has obtained a loan facility of N250 billion from a consortium of 15 Nigerian banks. The telecom giant is also obtaining additional funding totalling $450 million from two foreign banks. The facilities were arranged by MTN itself and will deploy the proceeds to further expand its network across the country to brace up for the heightened competition which Bharti’s entry into the Nigerian market will pose. On Monday, India’s Bharti Airtel sealed its longstanding $9 billion acquisition deal with the Zain Group of Kuwait, in which it took control of its Africa operations, including Zain Nigeria.
Bharti has a reputation for trying to distress the competition wherever it operates, by crashing prices and expanding geographical coverage, among other strategies.
A day after closing the deal for acquisition of Zain’s Africa assets for $10.7 billion, Bharti Airtel said it would introduce the concept of ‘affordable tariffs’, a move that may initiate a price war in the continent. “We will not go for tariff cut. We will go for a long-term affordability strategy which is good for the customer and for the company,” Bharti Airtel CEO and in-charge for international operations Manoj Kohli said.
“The monthly usage is 60-70 minutes per customer in Africa against 450-500 minutes in India. There is a pent-up demand. Tariffs are high in Africa. Our objective is not to introduce low tariffs in Africa… Our objective is affordability. We will see the level of affordability normal customers want,” he said. People believe that MTN is up to the task and that subscribers stand to gain from the heightened competition that is in the offing.
As at September 2009, MTN had 28.74 million subscribers, while GloMobile had 16.22 million and Zain had 14.93 million in Nigeria.
At the formal signing of the loan agreements in Lagos on Wednesday, MTN’s chief executive officer, Ahmad Farroukh, described the development as “another historical milestone in the development of telecommunications in Nigeria.” As the largest ever naira-denominated syndication in the country, this record-breaking financing follows the raising of a $2 billion facility in 2007 which won African Telecoms Deal of the Year award by Euromoney. At the time, it was the largest facility granted to a single country telecommunications operator in Africa. MTN Nigeria also won the award for its maiden financing in 2003.
The naira tranche of the facilities has a tenor of five years and the banks that participated in the syndication include Access Bank, Afribank, Bank PHB, Citibank Nigeria Limited, Diamond Bank, Ecobank Nigeria, FCMB and Fidelity Bank.
Army Chief Lauds NIMASA Boss Over Performance
The Chief of Army Staff (COAS), Lt Gen Faruq Yahaya, has commended the Director General of Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Bashir Jamoh, over his efforts in transforming and promoting the transportation sector as president of the Chartered Institute of Transport Administration of Nigeria (CIoTA).
He gave the commendation recently, during the 4th National Transport Summit of the Institute in Abuja.
Yahaya, who was represented by Maj. Gen. E. Akerejola, commended the President and members of CIoTA for the many economic sectors it touched: from facilitating international trade, through supporting food security, to enabling industrial and infrastructural development.
In the same vein, the Nigerian Army and other security agencies pledged their support to the growth and improvement of the country’s transportation sector to international standards, expressing their willingness to collaborate with CIoTA to achieve this feat.
The COAS stated that the theme of the summit, “Transport Safety and Security Administration in Nigeria”, was also timely, saying it is “an important aspect of the Transportation sector which has often been overlooked by many, including the transport professionals and academia.
“Over the years, the transportation sector has witnessed series of issues and challenges ranging from poor infrastructure, poor regulations, limited specialised professional training institutions, lack of effective and efficient transport policies, intra industry squabbles among transport professionals, to unethical behaviours, poor working condition amongst others,” he said.
He reassured the Institute of the Nigerian Army’s resolve to support the transportation sector wherever necessary.
On his part, President CIoTA and DG of NIMASA, Dr. Bashir Jamoh, whose speech was read by Prof Samuel Odewumi, noted that the theme for this year’s summit is focused on safety and security of the transportation sector in Nigeria.
In his words: “We were able to achieve the Chartering of the Institute, Renewed Advocacy, Vigorous Membership Drive and Certification. This year’s summit focuses on Safety & Security on all modes of transportation, hence we must all work together as stakeholders and custodians of the transportation sector of Nigeria.
“Safety and security are paramount to achieving a robust and intermodal transport regime in Nigeria.
“CIoTA as the only statutory professional association in charge of the Transportation Industry in Nigeria, therefore, deserves to be accorded its place in nomination of members into relevant agencies and in consultations for policy formulation and implementation strategies. It is the right thing to do.
“As a Chartered Institute, our role is very huge; with great opportunities and challenges. Let’s focus on the job at hand”.
By: Nkpemenyie Mcdominic, Lagos
Revenue Challenges: DMO Sues For Efficient Tax Administration
As part of efforts to tackle revenue change in the country, the Debt Management Office (DMO) has called for the operation of an efficient and effective tax administration in Nigeria
Director-General of the agency, Ms Patience Oniha, who made the call in a statement made available to journalists, stressed on the need for Nigeria to operate such efficient tax administration system, that will tackle loopholes in revenue generation of the country.
According to her, a lot of loopholes are noticeable in the current tax system, which has given room for evasions and all sorts of sharp practices, causing hiccups in the public revenue management system.
She said revenue challenge remains one of the most critical policy issues of the Federal Government which is currently threatening the nation’s debt sustainability.
“The country needs to operate an efficient tax administration that would ensure greater compliance to remittances devoid of all forms of evasions in the system,” she said.
Recall that the current revenue problem is compounded by leakages such as an increase in oil theft and petrol subsidy, both of which have significantly reduced the revenue from oil sales that used to account for the bulk of government revenue.
Oniha noted that the outlook of both the local and international markets was becoming tighter with rising interest rate.
The DMO boss, therefore, stressed the need for the country to urgently moderate its new borrowings and ensure that public debt is sustained by accelerating its revenue base to shore up non-oil revenue and rationalising expenditure of the nation.
By: Corlins Walter
214m Persons Subscribe To Telecoms In Nigeria
Active telecommunication subscribers in Nigeria have now increased to 214.35 million as at October this year, according to data from the Nigerian Communications Commission (NCC).
The latest NCC statistical records so far obtained shows that this is the highest number of recorded telecoms subscribers in the nation since the total number of subscribers peaked at 207.58 million in October 2020, some months before the SIM-NIN linkage.
The record has revealed that more subscribers were getting new SIMs in a bid to circumvent restrictions on SIMs that had not been linked with their National Identification Numbers, which was the major reason for the growth in 2022.
One of the major service providers in Nigeria, MTN, in its third quarter release through the Chief Executive Officer, Karl Toriola, said the average daily gross connection was 48.1 per cent above the pre-directive level, partly driven by the cohort of subscribers who were initially restricted and opted to register new SIMs.
“Combined with increased usage from the existing base, these have supported an acceleration in the service revenue growth recovery and mitigated the impact of churn on the base”, he said.
Also looking at the predictions in the industry among the global industry’s stakeholders, Nigeria has a sizeable number of its population under the age of 18, which is indicating that its subscriber growth would remain strong for the foreseeable future as more young consumers crossed into adulthood and subscribed to mobile services.
Given the growing population, it is expected that 18 million new Nigerians will become unique telecoms subscribers even by 2025, and as Mobile connectivity is at the core of connectivity in Nigeria, with the majority of online services accessed through mobile channels in the nation.
Records have shown that mobile ecosystem also supported more than 3.2 million jobs (directly and indirectly) and made a substantial contribution to the funding of the public sector, with $16bn raised through taxes on the sector, and this will grow in coming years.
However, inspire of this growth, many will not have access to telecom service, just as the Federal Ministry of Communications and Digital Economy had said that about 31.6 million Nigerians live in areas without telecoms coverage.
The absence of such coverage, according to the ministry, had enabled criminal activities and insecurity in these unserved areas to thrive.
By: Corlins Walter
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