Barely a week after President Umaru Yar’Adua instructed the new board of NITEL to privatize the company within 60 days, 13 potential investors have expressed interest in the sale of, at least, 75% of NITEL, the former government owned Telecommunications giant
The Bureau for Public Enterprises (BPE) said it would evaluate interest from companies including the Nigerian arms of South Africa’s MTN and Emirates Telecommunications Corp (Etisalat), MTNL India, a group involving Spain’s Telefonica and Nigerian firm Globacom.
Nigeria, Africa’s most populous nation, is one of the world’s fastest growing mobile markets, adding 7 million new subscribers in the last quarter of 2008 alone, and has overtaken South Africa to become the biggest on the continent.
That could make it attractive to foreign investors, particularly if NITEL’s M-TEL mobile unit can be bought at the right price. However, the Nigerian government has struggled to sell NITEL, largely because of the state of its fixed line infrastructure.
The BPE said preference would be given to bidders seeking to acquire NITEL’s fixed lines, its transmission backbone, components of its South Atlantic Terminal underwater cable (SAT-3) and mobile unit M-TEL together. Those bidding separately for M-TEL must make necessary investments to detach M-TEL from the NITEL networks, the BPE said.
NITEL’s fixed lines have fallen to less than 100,000 from five times that figure in 2001, while M-TEL subscribers have dropped to a few thousand.
New investors have been hard to find. Nigeria ended NITEL’s monopoly in Africa’s most populous nation in 2001 and tried to sell the operator the same year. However, preferred bidders failed to pay the $1.3 billion price tag by the deadline, leaving it in state hands.
Local conglomerate Transcorp later bought a majority stake but the government took back control in June, citing a lack of investment and unpaid debts.
Nigeria came close to selling NITEL in late 2005 to Egypt’s Orascom Telecom, but the government rejected the $257 million offer as too low. NITEL’s infrastructure fell into disrepair during decades of inefficient state management.