*Group
formally pulls out, firm shops for new investors
• ALTON,
ATCON assure 20m subscribers of protection
The crisis
rocking Etisalat Nigeria deepened yesterday with a directive from the
Emirates
Telecommunications Corporation (ETC), the largest shareholder in the embattled
firm, that the Nigerian arm should stop using the brand name within the next
three weeks.
The
implication is that the new management must decide within the next 21 days on
the options before it, which are either an outright sale of the company or
merger with an existing operator in the country.
Etisalat,
which controls 13 per cent market share in Nigeria, has had a running battle
with a consortium of 13 banks since March, after it notified them of its
inability to service its $1.2 billion debt in February due to the foreign
exchange challenges in the country.
The firm had
through its Vice-President, Regulatory & Corporate Affairs, Ibrahim Dikko,
three weeks ago, claimed that it had repaid 42 per cent of the loan.
“As at
today, we can categorically state that the outstanding loan sum to the
consortium (of banks) stands at $227 million and N113 billion, a total of about
$574 million if the naira portion is converted to U.S. Dollars. This, in
essence, means almost half of the original loan of $1.2 billion, has been
repaid.”
The Chief
Executive of Etisalat International, Hatem Dowidar, told Reuters yesterday that
Abu Dhabi’s Etisalat had terminated its management agreement with its Nigerian
arm and given the business time to phase out the brand in Nigeria.
Etisalat had
been ordered to transfer its shares to a loan trustee after the talks which
brought up management changes to the Nigerian arm.
Dowidar said
all UAE shareholders of Etisalat Nigeria had exited the company and left the
board and management. He said discussions were ongoing with Etisalat Nigeria to
provide technical support, adding that it could use the brand for another
three-week before phasing it out.
Etisalat had
already planned a name change, according to a source, who claimed that there
was nothing to worry about on the matter. He said Emirate Telecoms Group, which
hitherto had 45 per cent shareholding, had pulled out of the business. Other
shareholders in the company are Mubadala Development Company (40 per cent) and
Emerging Market Telecommunications Services (EMTs) (15 per cent). While the
first two investors are from UAE, the third, which is EMTS, is from Nigeria,
led by the former chairman, Hakeem Bello-Osagie.
On the
development, the Director of Public Affairs at the Nigerian Communications
Commission (NCC), Tony Ojobo, told reporters that the regulator was not aware
of such a deadline. “If there is anything like that, Etisalat will need to
write the commission officially,” he said.
Besides,
there is a report that two telecommunication giants, Orange and Vodafone
Groups, are in a race to buy 65 per cent of Etisalat Nigeria, following the
pullout of its major shareholders.
An industry
source claimed that Africa’s richest man, Alhaji Aliko Dangote, might be
nursing the ambition of helping the troubled telecommunications firm by buying
up the shares.
In December,
2010, The Guardian reported how EMTS purchased Alheri Mobile Services Limited,
a fully owned subsidiary of the Dangote Group. Alheri Mobile was a holder of a
3G licence for Nigeria. The acquisition put Etisalat Nigeria in the position of
having immediate access to and full use of a 3G licence in line with the other
three GSM operators in Nigeria.
The pioneer
CEO of Etisalat Nigeria, Steve Evans had stated: “We are delighted to acquire
the 3G licence, which is an essential element of our plans for further
developing the market for mobile broadband in Nigeria. We have placed a strong
emphasis on offering data services to all our customers from launch through
enabling ‘Edge’ on all our cell sites throughout Nigeria. Now with 3G, we can
further develop our data and mobile broadband portfolio and offer our customers
even higher levels of service. There is pent-up demand in Nigeria for broadband
and we intend to be leaders in satisfying it.”
Then
Chairman of EMTS, Hakeem Bello Osagie said: “We are very happy with the
acquisition of the 3G licence and with the professional way in which the
negotiations were led by Mr. Aliko Dangote and his team. We look forward to
further cooperation in the future.”
Interestingly,
the newly appointed interim CEO of Etisalat, Boye Olusanya, was the managing
director of Alheri Mobile and head of Dangote’s telecommunications arm. “It
makes sense for us to sell Alheri Mobile to Etisalat Nigeria as we believe that
the market here can only sustain four mobile operators in the medium to long
term. We intend to use the capital raised to develop our other assets in the
telecommunications market and we look forward to continuing to deepen our
relationship with Etisalat Nigeria.”
On the new
development, the Chairman, Association of Licensed Telecoms Operators of
Nigeria (ALTON), Gbenga Adebayo, said that as people were aware of the new
management team, “we do hope that the brand issue will be resolved without any
impact on the subscribers and as part of the overall resolution of all issues
affecting our members (Etisalat). We are hopeful and optimistic that the brand
will overcome the current challenges. We continue to assure management and
staff and their subscribers of ALTON support at all times,” he said.
To the
President of the Association of Telecommunications Companies of Nigeria
(ATCON), Olusola Teniola, the brand image of Etisalat is key to the 20 million
subscribers that identified with the youth profiling that the brand sought to
attract.
Teniola said
it was inevitable when Abu Dhabi Emirates pulled out that their brand would
also leave.
According to
him, like the various and many changes in Econet to now Airtel, “it appears
that this change in name from Etisalat Nigeria will hopefully not mean a change
for the worst in terms of the quality of service Etisalat was known for in its
data service offering. We expect a proactive communication from the new
management of what this means to their loyal customers.”
Meanwhile,
at press time, Etisalat Nigeria was yet to issue a statement on the deadline on
the use of the brand name.
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