…Etisalat Group completes pull out from Nigeria
…NCC insists Communications Act must apply where necessary
…Etisalat Nigeria commits to quality service
By Prince Osuagwu (Hi-Tech Editor) & Emmanuel Elebeke
LAGOS — Another change of brand name in the Nigerian telecoms sector is imminent following the termination of a management agreement with Etisalat Nigeria by its brand parent, Etisalat International of the United Arab Emirates.
Chief executive of Etisalat International, Hatem Dowidar, yesterday, gave Etisalat Nigeria another three weeks to use the brand name and phase it out completely.
In an interview with Reuters, Dowidar confirmed that “all UAE shareholders of Etisalat Nigeria have exited the company and have left the board and management.”
He also disclosed that “discussions were ongoing with Etisalat Nigeria to provide technical support; it can use the brand for another three weeks before phasing it out.”
However, a reliable source at Etisalat Nigeria told Vanguard, yesterday, that the development is not in any way capable of shifting its focus from providing quality telecoms services to its over 21 million subscribers in Nigeria.
The source said: “We are looking at the development and will meet to review it. We will come up with a statement when we finish discussion on the issues involved. But one thing you have to be sure of, is that the company will continue to give Nigerians quality service; No situation can change that.”
Not the first telecom brand change
The brand name change, when it happens, will not be the first on the nation’s telecommunications landscape.
Following completion of the first round of GSM licensing, Econet Wireless Nigeria, EWN, started business with the 0802 number plan on August 5, 2001. All seemed well, until 2004, when after a shareholder dispute, the company was purchased by Vodacom of South Africa. Suddenly Vodacom pulled out of the country in one of the shortest-lived corporate deals. The company quickly pulled itself together, and resumed trading as VMobile Nigeria, owned by Vee Networks Limited.
As the year 2006 dawned, subscribers, who were just getting used to the Vmobile brand name could not know that soon another brand name change was imminent.
In May of that year, Celtel International, owned and promoted by a Sudanese electronics engineer, Dr. Mohammed Ibrahim, acquired majority equity in Vee Networks. Again, a little over two years after the Celtel brand had become entrenched, Mo Ibrahim’s Celtel International fell prey to another corporate investor, MTC Group of Kuwait, which later tranformed into the Zain Group. Zain effected another re-branding.
Finally in March 2010, Bharti Airtel of India bought over Zain’s operations in Sub-Saharan Africa, which included Nigeria, and the company was renamed Airtel Nigeria, which it has been to date.
The intervention of Nigerian telecom and banking regulators, the Nigerian Communications Commission, NCC, and the Central Bank of Nigeria, CBN, saved Etisalat Nigeria from being taken over by a consortium of Nigerian and foreign banks after talks to renegotiate a $1.2 billion loan failed.
The loan facility totalling $1.72 billion (about N541.8 billion) involving a foreign-backed guaranty bond, which Etisalat secured in 2013, was for the telecom company to turn around its network and expand its operations in Nigeria. However, the banks claimed that Etisalat had failed to service the debt as agreed since 2016.
The consortium, comprising Nigerian and foreign banks, said it got the approval to take over the management of Etisalat Nigeria, effective June 15, but decided to extend enforcement of the order to June 23, 2017 after which Emerging Markets Telecommunications Services, EMTS, may have completed transfer of the 100 percent of the company’s shares in Etisalat to the United Capital Trustees Limited, the legal representative of the consortium of banks.
The takeover followed the collapse of the efforts by EMTS to reach agreement with the banks on restructuring plan for the $1.72 billion (about N541.8 billion) debt.
Etisalat has been under pressure since 2016, following the demand notice for the recovery of loan facility it obtained from the consortium
Etisalat said it was not able to meet its debt servicing obligations due to stringent forex policy and recession in Nigeria but appealed for a restructuring plan. However, the Nigerian banks, prodded by their foreign partners, threatened to take over the company and its assets across the country.
But the intervention of the telecom sector regulator, NCC, and its financial sector counterpart, CBN, persuaded the banks to rethink their threat and give Etisalat a chance to renegotiate the loan’s repayment schedule.
However, Etisalat of the UAE, which currently holds 45 per cent of Etisalat Nigeria, announced at the Abu Dhabi Stock Exchange, penultimate week that attempts to stave off the company’s takeover have proved abortive and so pulled out its investment in the company. Its technical partners, Mubadala, also followed suit, leading to a massive resignation of top executives of Etisalat Nigeria and the chairman of the board.
Last week, a new board was appointed and new management put in place at the troubled telecommunications company.
The twist of the current development from Etisalat Group is that the NCC had earlier warned of a name change at Etisalat, saying it would require another license to operate a name other than that which it had earlier issued a license on.
The commission said although it was aware of Etisalat’s indebtedness to the consortium of banks, it, in conjunction with the CBN, held several meetings with the banks, Etisalat and other stakeholders with a view to finding a resolution, it was regrettable the meetings did not yield the desired results.
Director, Public Affairs of NCC, Mr Tony Ojobo, in a statement, said: “The commission has drawn the attention of the banks to provisions of the Nigerian Communications Act (NCA) 2003 Section 38: Sub section 1: The grant of a license shall be personal to the licensee and the license shall not be operated by, assigned, sub licensed or transferred to another party unless the prior written approval of the commission has been granted.
“Sub section 2: A licensee shall at all times comply by the terms and condition of the license and the provision of this act and its subsidiary legislation. The NCC wishes to reassure the over 21 million Etisalat subscribers that it will do all within its regulatory power to ensure that Etisalat subscribers continue to enjoy the services provided by the operator.”
When contacted on the new development, an NCC source said the commission also stood firmly by the provisions of the Nigerian Communications Act, adding that the law must be applied where necessary without prejudice to whatever arrangements are on ground.