Nigerian gov't hands over Nitel, Mtel assets to NATCOM

The Nigerian government has officially handed over the assets of Nigerian Telecommunications (Nitel) and its mobile arm, Mtel, to the NATCOM consortium, but there is general pessimism about the ultimate fate of the telecom company.

NATCOM last week paid the $252 million acquisition price for Nitel and Mtel. Over the years, the government has tried multiple times to sell the former national carrier. Several groups including Omen International, Investor International London and the New Generation Consortium led by China Unicom all ended up failing to pay their bid prices for Nitel and Mtel.

As in many African countries, the Nigerian government failed to recapitalize its national carrier.

Nitel and Mtel assets acquired by NATCOM include licenses and spectrum, fixed wire networks, its international gateway, towers and transmission equipment.  

Industry watchers have doubts about whether NATCOM can turn around the company. Most of the company’s infrastructure is obsolete and has been run-down for years.

Additionally, Nigeria’s telecom market, the biggest in Africa, has more than 11 mobile service providers competing for customers. This has raised fears that the market might has become saturated.

Nigeria currently has more than 140 million mobile phones subscribers, according to the Nigerian Communication Commission (NCC)’s monthly subscriber data for April 2015. The country has a  population of about 170 million people.

The National Council on Privatization chaired by Nigeria’s vice president, Namadi Sambo, said last week that NATCOM has fulfilled all the conditions stated in the bid process and has paid the bid price in full. Sambo said the privatization council therefore has approved the handover of Nitel and Mtel assets to NATCOM.

The Nigerian government originally tried to sell the two companies almost 13 years ago through a competitive bidding process. But tentative deals struck through normal bidding processes all fell through for various reasons.

This forced the privatization council to approve the privatization of Nitel and Mtel through “guided liquidation.”

Under the guided liquidation strategy, all the core assets and business undertakings of Nitel and Mtel were to be sold to a qualified bidder by a liquidator. The main proviso in the guided liquidation process was for the bidder to operate the assets to provide telecommunication services in the country. This strategy differs from the traditional liquidation of a company, which typically involves stripping assets and selling them to various bidders.

Drexel and announce Analytics 50 award winners
View Comments
Join the discussion
Be the first to comment on this article. Our Commenting Policies