A shocking $2.5 billion bid by New Generations Telecommunications Consortium (formerly Telefonica) threw competitors off balance to clinch the preferred bidder slot at the financial bid opening for the acquisition of 75 percent of the moribund national telecom carrier, Nigeria Telecommunication Ltd and its mobile arm, MTel.

New Generations Telecommunications Consortium has GiCell Wireless Limited (a nNigerian company), China Unicom (Hong Kong) Limited, and Minerva Group as members.

With this development, the preferred bidder now has to pay $750 million within 10 days from the date of National Council on Privatization NCP approval while the balance is expected within 60 calendar days of the council’s approval.

MTN Nigeria also emerged the sole bidder for SAT-3 with an offer of $25 million, though its offer is still subject to the confirmation of the National Council on Privatisation (NCP) subject to meeting the reserve value for the bids.

Source

When NITEL was recently put up for sale for the umpteenth time, I expressed the absurdity of Globacom’s interest in purchasing NITEL. Both NITEL and Globacom are national operators – and they are the only two. It simply would be counter-productive to allow such a purchase take place. We would simply return to a state of monopoly.

Thankfully, the NCC (Nigerian Communications Commission) and BPE (Bureau of Public Enterprises) have taken steps to ensure that such a purchase does not happen. Excerpts from the news item:

For instance, Globacom was told that by virtue of its Second National Operator (SNO) licence, it cannot buy NITEL as a whole unit, as this “would leave Globacom with two SNO licences and would hence, be anti-competition”. Chigbo Anichebe, the spokesperson for the BPE, explains, “Because of Globacom’s SNO licence, they will not be allowed to also bid for the domestic fixed telephony lines, as they already have the licence to operate their own.” The company cannot also bid for SAT-3, as applies to Etisalat and MTN.

“The Nigeria telecom operators, that is, MTN, Etisalat, Zain and Glo shall not be allowed to purchase the mobile arm, M-TEL, since they presently hold Digital Mobile Licence and General System for Mobile (DML/GSM) licences. To the Nigerian Communications Commission (NCC), the purchase of M-TEL by any of the present GSM licence holders would present competition challenges and will conflict with regulatory guidelines and licensing conditions.”

Interestingly, the CEO of one of the operators was quoted as saying, “We are surprised that the BPE and NCC could do such.”

I am at a loss as to what exactly is surprising about these decisions. Why would an operator want to hold two GSM licences? To what purpose? Why would a sane regulator allow an existing national operator to take over the only other national operator?

Dr. Emmanuel Ekuwem, the president of the Association of Telecommunications Companies of Nigeria, summed it up well when he said, “Globacom is already a second national carrier and the firm has the licence to operate the same services as NITEL. The telecoms sector must have sanity, when a company gets really too big and too powerful with a large coverage, that can affect competition in the industry.”

Good move by the NCC and BPE.

Source: 234next.com

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