Following a directive from the Nigeria Communications Commission (NCC), the Bureau of Public Enterprises (BPE) has said that no telecommunications company that already has presence in Nigeria should be allowed to buy M-Tel.
The BPE Director-General, Dr. Christopher Anyanwu, said there are fears that if the privatization agency allowed any of the four GSM-licensed operators to buy M-Tel, it would present competition challenges and conflict with the regulator’s guidelines and licensing conditions.
Consequently, the BPE has blocked three international mobile operators and a local one from buying M-Tel, the GSM (Global System of Mobile Communications), component of Nitel because they already hold GSM licenses in Nigeria.
India’s state-run Mahanager Telecom Nigam has also been disqualified from bidding for Nitel because of the company’s low equity base. In addition, the government wants bidders for Nitel to have a $200 million equity base.
Mobile Telecommunication Network (MTN), Zain, Etisalat and the country’s second national carrier, Globacom, have all been blocked from buying M-Tel.
Nigeria, is Africa’s largest mobile market by subscriber base and level of investment, followed by South Africa.
The government is eager to sell its 75 per cent equity in Nitel to another core investor after it reacquired the firm from TRANSCORP on ground of breach of contract agreement.
Following that development, President Umaru Musa Yar’Adua, directed that the company be sold to a new investor within 60 days following months of wrangling, political intrigues and corruption allegations by the Federal Government, BPE and NCC over the sale of the company.
The problems surrounding the sale of Nitel underline the difficulties that African governments face in privatizing incumbent telecom companies. Generally, corruption and lack of transparency among senior government officials, have been at the root of problems surrounding the privatization of African Telecom companies.
“We urge all African countries that are in the process of privatizing their incumbent operators not to make the same mistakes that have been made by the Nigerian government in the privatization of Nitel,” said Amos Manyarara, Communications Officer for Southern Africa Mobile Communication market.
The four service providers that have been blocked from the race to buy M-Tel were among many international service providers including Telefonica Consortium in Spain, Omen International in the UK, Ericsson Consortium and Galaxy Back-bone.
The NCC has also directed BPE to unbundle Nitel in units to be sold separately. Following the directive from NCC, the Nigerian government said it has started unbundling Nitel and that any of the four barred local operating mobile service providers could be allowed to purchase Nitel alone without M-Tel and SAT.3
Nitel is being unbundled into a digital mobile licensing and infrastructure (M-Tel), long-distance license and infrastructure (Fiber and microwave), international gateway and SAT-3 submarine cable access and fixed network – CDMA fixed wireless, digital switches, metropolitan fiber cable networks and external line plants cable networks.