Three more firms may withdraw from NITEL bid

  • Wednesday, December 07, 2005 - Everest Amaefule, Abuja
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There were strong indications on Tuesday that three investors jostling for 51 per cent equity in the Nigerian Telecommunications Limited may withdraw from the process, thereby leaving only two contenders in the race.

Sources told our correspondent that Celtel International B.V., a South African fixed operator, Telkom and Huawei/Jacuz Consortium might be the latest to withdraw from the race, which has been marked by several hiccups.

The South African leading mobile operator, Vodacom, which had been in a consortium with its parent company, Telkom, was the first bidder to opt out some weeks ago owing to the insistence of the Federal Government that both NITEL and Mtel would be sold as an entity.

Vodacom had been interested in the mobile arm of NITEL and had made an unsuccessful case for the separation of the bids for Mtel and NITEL.

On the other hand, MTN Nigeria Communications Limited, withdrew from the process last week following the ruling by industry regulator, the Nigerian Communications Commission, that a licensee of the commission should not be allowed to acquire NITEL.

The agency’s decision was based on the fact that if a significant operator was allowed to acquire the national telecoms operator, it could result in an industry monopoly.

The firms’ interest in NITEL was said to have waned following the decision of the Federal Government to withdraw the submarine fibre optic cable popularly known as SAT-3 from the bouquet of NITEL that is up for sale.

This leaves Orascom of Egypt and Newtel International in the race to become core investor in the first national telecoms company and its mobile subsidiary, the Nigerian Mobile Telecommunications Limited.

When contacted, the spokesman for the Bureau of Public Enterprises, Mr. Chigbo Anichebe, told our correspondent that the agency was not aware of the withdrawal of the bidders from the privatisation process.

He said, “If you tell me that Celtel has withdrawn from the process, I would not be surprised. This is because they have a strong interest in Vmobile. However, we are not aware that any firm has withdrawn. Even MTN, which NCC said couldn’t participate in the race has not officially told us they are no longer in it.

“We have also heard rumours that Telkom is no longer in the race, but bidders could use this kind of strategy to scare others to withdraw. They could deploy rumours of withdrawal to scare their opponents to beat a retreat.”

Our correspondent learnt that the most formidable group left in the race to acquire NITEL is the Orascom consortium. It is said to be keenly interested in acquiring NITEL as a way of entering Nigeria, having established vast interest in the entire Middle East and East Africa.

The Ministry of Communications and BPE had been locked in cold war over the inclusion or exclusion of SAT-3 in the NITEL package. However, the Ministry of Communications issued a statement about four weeks ago to the effect that SAT-3 would not be sold along NITEL.

“A holding company, the Nigerian Cabling and Telecoms Network Limited, has been incorporated for the management of SAT-3, following approval granted to Ministers of Communications and Finance.

“The new holding company is to guarantee the availability of this valuable asset to all users in the communications industry, rather than make it the exclusive property of any private company that a sold NITEL will become,” the statement said.

Over the controversial SAT-3, a Federal High Court in Abuja had directed BPE to suspend the privatisation of NITEL pending the determination of a suit filed by NITEL workers.

NITEL workers had sued the Federal Government over its decision to exclude SAT-3 in the sale of the network operator.

A senior NITEL staff that spoke to our correspondent on Monday on the condition of anonymity said excluding SAT-3 from the sale of NITEL is like removing the engine of car and offering it for sale. “The car would be less attractive,” he added.

Twenty-one companies had by January 28 indicated interest in acquiring 51 per cent shares in NITEL as core investors. These included CelTel International B.V., New Tel International, Z.T.E Corporation, Metallon Corporation of South Africa, Huawei Technologies Company Limited, Dimension Data and Tel Africa Group of United Kingdom.

Others are ACME Global/General Dynamic of United States and Meridian Global Telecom, U.K. Videsh Sanchar Nigam Limited of India, MTN Nigeria Limited, Vodafone Group Services Limited and Trigger Development Limited of United Kingdom.

Suburban Telecom, Orascom Telecom, Universal Link Inc., Telkom South Africa in alliance with Vodacom, Global Infrastructure Holdings Limited (Dubai), F.T. Networks Limited, Harthill Finance, Singapore and Multimesh Communication Limited also expressed interest.

The list was, however, pruned down to six after an initial screening. MTN Nigeria Communications Limited, Telkom/Vodakom Consortium, Huawei/Jacuz Consortium, Orascom, Celtel International B.V. and Newtel International made the list of six that are now in contention.

The PUNCH, Wednesday, December 07, 2005

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