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Daily Independent Editorial: Privatisation of NITEL: Matters Arising

Privatisation of NITEL: Matters Arising Editorial

It is not an exaggeration to say that several Nigerians were excited, just as we were last week, following the announcement by the BPE that it had at last found a buyer willing to pay $2.5billion, for 75% of the moribund Nigeria Telecommunications Plc (NITEL). That buyer according BPE is New Generation Telecommunications Consortium, which is made up of the following companies: China Unicom (Hong Kong), Minerva Group of Dubai and GiCell Wireless Ltd of Nigeria. But no sooner did this information filter out, than a barrage of criticisms from several interested parties took centre stage.

First was the release by the Spokeswoman of China Unicom Sophia Tso, all the way from Hong Kong that neither her company nor its unlisted parent, participated in the bid for the privatisation of NITEL, and that the company was not aware of any such transaction not to talk of being a part of it. Unicom Europe almost immediately came out to retract this statement through the President of China Unicom (Europe) William So, who stated that the company was "willing to be technical partner to support New Generation Telecommunications Ltd Consortium to bid for NITEL and to provide technical and managerial support on terms to be agreed later, when the bid is finally won". Although, his statement succeeded in at least calming frayed nerves, another advertorial two days later, again by the same company and this time in most of Nigeria's Newspapers, have left many disconcerted if not bewildered. As if this was not enough, Telecom Corporation of New Zealand initially listed as technical partner to second reserve bidder Brymedia West Africa Ltd, has equally denied ever participating in any bid to acquire NITEL. Against this background, it is no longer in doubt that something is wrong with the entire process.

NITEL is a monumental national asset that has been allowed to rot. There was a time when it was one of the country's cash cows. Unfortunately, it was grossly mismanaged leading to the overwhelming support by many for it to be privatized. In fact, we strongly believe that there could be certain secrets about NITEL and its privatisation that is still hidden to Nigerians. Otherwise, how do you explain the ongoing controversy given that the latest effort is the fourth in the process? Recall that this company, again, contrary to the successes so far recorded by the BPE in Nigeria's privatisation process, had unsuccessfully been sold to Pentascope, Investors International Limited (ILL) and Transcorp.The reasons for previous failures include buyers not being able to meet up with their financial obligation; inability to transform the company as agreed; failure to adhere to the terms of the Share Sales Purchase Agreement (SSPA); and, inability to meet obligations to pay staff salaries. As these things happened the fortunes of NITEL further depreciated.

You can then imagine the joy of many Nigerians, on hearing that someone was in fact offering $2.5 billion for the same NITEL that had almost completely been written off. Again, this is given that the amount being offered by New Generation Telecommunication Consortium is over $1 billion above what it was sold previously. Are you as surprised as we are? Is NITEL really worth that price? Could there be some individuals that may have sworn that nothing good will ever come out of this company? Is NITEL jinxed?

Nevertheless, we are consoled by the statement late last week by Acting Chairman, Technical Committee of the National Council on Privatisation (NCP) Prof. Taiwo Osupitan that the latest bidding was "done with transparency and backed up by integrity, which remains unaffected and untainted" and that "the transactions were done in accordance with the best practices and standards obtainable in the international community". The statement by MD of GiCell Wireless and Nigerian Representative of New Generation Telecommunication Consortium, Usman Gumi that the Consortium is ready to pay the bid price given their conviction that "NITEL is worth the amount because of the infrastructure and potential that it has" is even more reassuring.

We suggest that the National Council on Privatisation (NCP), which supervises the BPE, must thoroughly and transparently examine all issues involved in this matter to ensure that it does not repeat the mistakes of the past. That Nigeria has suddenly become Africa's leading telecom market with over 62 million subscribers confirms our belief that there is still so much potential not only in NITEL but also in the country's telecom industry.

For this reason no honest investor will ever regret doing business in this sector. However,NCP's role is key. It must ensure that the ongoing process does not fail again otherwise it may be difficult to attract willing buyers for NITEL in the future.

Regions : Africa

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