As the curtain has been drawn on the bidding process for 9mobile formerly Etisalat, network stakeholders and Information Technology experts who have been following the events revolving around the fourth largest mobile network in Nigeria since last year are waiting with apprehension for whom among the suitors will land the priced jewel.
Prior to the closure of the bidding process on January 16, 2018, five companies were shortlisted from the 16 that entered the race to acquire 9mobile. They are Globacom, a Nigerian mobile network owned by Mike Adenuga, Teleology Holdings Limited owned by Adrian Wood, former CEO of MTN Nigeria, Bharti Airtel, an Indian telecommunication Company that currently owns majority stake in Airtel Nigeria, Smile Telecoms Holdings, a telecommunication company operating in Nigeria, South Africa, Congo DR, Tanzania and Uganda and Helios Investment Partners LLP said to be a telecom investment company.
The Next Edition gathered that the shortlisted bidders after scaling three bidding processes to the final stage were given approval to access the data room of 9mobile in order to enable them access the financial situation of the company and subsequently make bids for the takeover of the company.
According to Umar Danbatta, Executive Vice-Chairman, National Communication Commission (NCC), the final process to select the winner is being handled by Barclays who will review the bids with the supervision of the NCC and Central Bank of Nigeria (CBN) and make recommendation to the interim board of 9mobile.
He added that the NCC and CBN would be duly notified once the mobile network provider Board accepts Barclays recommendations and the winning bid will then be determined in accordance with the terms of the exercise. The winner of the bid, the NCC board explains will then have to apply to NCC to commence the processes for securing the regulatory approval from the Board of the Commission to give full effect to the transfer.
We also gathered that whoever emerges as the winner of the acquisition process, will undergo another due diligence regarding NCC compliance with licensing conditions, security checks and clearance and most important, the protection of national interest.
Again the winner, according to the procedure, will be invited to negotiate and agree to the payment terms for the takeover. Under the terms of the final payment and take over, should the preferred bidder which is the company with the highest bid, fail to meet the payment terms within the stipulated period agreed with the supervising company Barclays, the reserve bidder or second highest bidder will then be invited to acquire the network provider.
A peep into the profile of the five final bidders, shows that on paper, Globacom promoted by Adenuga and the second largest network in Nigeria with over 37 million subscribers’ portfolio after MTN, stands in a strong pole to emerge the preferred bidder depending on the strength of its financial bid.
Glo status as a strong contender revolves around its network coverage with its 4G network covering major cities in 700 MHz band. Its operation is also boosted by its submarine cable laid across Nigeria and its array of standard infrastructure and financial strength.
Another strong bidder based on pedigree is Bharti Airtel, the parent company and key investor in Airtel Nigeria. The telecommunication company with base in India offers GSM, 3G and 4G LTE mobile services, fixed line broadband services. It is reputed to have a total asset base of $36 billion and equity of $12 billion with operational base spread across 17 countries in South Asia and Africa.
Similarly, as owner of Airtel, which is the third largest network in Nigeria with 35 million subscribers, put Bharti in keen contention for the acquisition of 9mobile.
However, telecommunication experts and stakeholders seem not to be very enthusiastic about the bid by Bharti Airtel given the fear that such acquisition may lead to another management crisis in the company, which led to the company changing from Econet-Vodacom-Vmobile-Celtel-Zain and now Airtel.
Telelogy Holdings Limited, one of the five shortlisted companies was established by Adrian Wood, former CEO of MTN. It has a club of wealthy Nigerians and foreigners as investors and in partnership with Ericsson. Apart from funds, telecom analysts see technical competence as one its challenges because the services rendered by 9mobile is far beyond telecomm accessories, vendor and funds mobilization the company has its core services. They wonder whether the company will have the ability to meet the expectations of Nigerians and NCC in offering quality services.
For Smile Telecoms Holdings, which provides 4G LTE mobile broad band services with operation in some other African countries like South Africa, a haven for telecom business like Nigeria, its major drawback, according to experts, is spread and capacity which is known to be limited. With this, the fear is would it be a task for the company to shoulder the responsibility of a network with 17 million subscribers?
The fifth in the pool Helios Investment Partners LLP, though has spread in some African countries is a private equity and venture capital company which specializes in buyout of requiring lifeline. Its major strong points is its diverse investments in telecommunications, oil and gas, financial services, horticulture and online retail. The company, which is said to have investment Africatel a Portugal-based telecommunication firm had run cell towers in Nigeria before. Analysts also argued that even as the company might have financial strength to buy 9mobile but the issue of competence in running a full mobile network may be a problem.
The race to acquire 9mobile began months ago with 16 companies submitting expression of interest, which is the first stage in bidding process.
The firms were Globacom, MTN, Bharti Airtel, ntel which acquired defunct federal government owned NITEL and Mtel, Bua Group promoted by Alhaji Abdulsamad Rabiu, Morning Side Capital Partners by former MD of Diamond Bank Alex Otti, Africell a subsidiary of Lintel, Obot Etiebet &Co of the former Petroleum minister Don Etiebet, Blackstone Equity, Telelogy Holdings and De-elim Services Limited. Others were Smile Telecoms Holding, Veittel, owned by an investment arm of the Vietnamese military with assets in Africa, AB-Bro Limited, a Nigerian joint venture company, Hamilton and Goerge International Limited and Helios.
From the 16 initial EOIs, 10 of them were pre-qualified to another stage of submitting their financial bids whereby the five were shortlisted.
However, it is significant to that the intrigues surrounding the bid and the crisis that threw up the decision by the regulators to put 9mobile on sale has taken a heavy toll on the mobile telecom firm in terms of loss of subscribers.
According to statistics available, 9mobile which many believed to be in financial distressed has lost close to five million subscribers in the past one year due to the crisis that engulfed the network and its lending banks.
According to NCC data, from over 22 million subscribers in 2016 , the 9mobile subscribers have now depleted to 17 million as at November 2017, representing 12 percent of the market. Checks at 9mobile friendship centres have revealed the obvious that many subscribers have dumped the network because of uncertainties as the centres usually bubbling with activities were bereft of customers. A development a staff who preferred anonymity blamed on the takeover crises, but insist that it has not affected their quality services.
Two subscribers of 9mobile who are aware of the crises confided in The Next Edition that they have stop recharging the line and are dumping it to avoid service disruption. Others have also ported to other network we learnt.
Trouble times for 9mobile formerly Etisalat began when it could not repay the N541 billion syndicated loan advanced to it by a consortium of 13 banks led by Access Bank in 2013 to fund upgrade of its network and finance an existing $602 million loan.
The problem had deepened when its major investor Mubadala of United Arab Emirates with 70 percent share equity pulled out of Etisalat due to the debt issue after the banks moved in to take possession of the telecomm company. It was this development that led to the interventions of NCC and CBN to wade in and save the firm which was on the brink of crash.
The intervention led to dissolution of Hakeem Bello-Osagie board and replacement with interim board led by Joseph Nnanna. The other new board members are Oluseyi Bickersteth, Ken Igbokwe, Boye Olusanya (CEO) and Funke Ighodaro Chief Operating Officer.
With the process for the emergence of preferred bidder for 9mobile still on the card the NCC and CBN have assured that they would conduct due diligence on the financial capacity and technical capacity of the bidders to ensure that whoever emerges as the preferred bidder has these parameters to improve the operations of 9mobile and add value in delivery of qualitative telecom services in the country.
The NCC boss, Umar Danbatta, has emphasized that the takeover will not be hostile and that whichever of the shortlisted bidders is picked must be able to grow the telecommunication business specifically and deliver value to subscribers.
Osebumere Odia, an Information Technology expert and economist, thinks it should be so. He wants only bidders capable of initiating green field operations and have demonstrated the capacity to attract foreign capital to Nigeria to be considered.
