By emeka aginam & NNAMDI OJIEGO

Gbenga Adebayo

THE recent cancellation of the offer of 75 per cent equity in NITEL to New Generation consortium at a bid price of US$2.5 billion is the latest in a series of failed efforts at selling the national carrier, with stakeholders reacting and offering opinions on the way out of an obvious quagmire.

For the President of the Association of Licensed Telecommunications Operators of Nigeria, ALTON, Engr Gbenga Adebayo, “Nitel is too heavy to be bought by one buyer.”

He disclosed that government was not coming out with the objective of selling Nitel and making it a self-sustaining organisation, saying, “that was why there have been problems on the issues of pricing.”

Adebayo suggested that for government to find the right attraction for Nitel, it must be broken into components and segmented into the various services the company offered.

“Nitel must be sold according to different arms. That way, it will attract the right investors who are interested in certain areas of services. The size of investment is heavy and it is not wise enough for an investor to buy. But if it is split into elements, people can express interest either in the mobile arm, or in the international gateway, and so on. I think this has been the problem”, he opined.

Adebayo also spoke on an idea making the rounds that government planned to merge NITEL with NigComSat. The Presidency, it was gathered, was already studying a proposal for the merger of the two organisations.

The proposal, it was gathered was signed by the office of the National Security Adviser

It would be recalled that NigComSat Limited had been slated for privatization by the Bureau of Public Enterprises in 2008.

Currently, NigComSat holds 15 per cent stake in NITEL and its mobile subsidiary, the Nigerian Mobile Telecommunications Limited.

“As stake holders, we must remind government that the industry has been fully deregulated and all the services offered by NITEL are being offered by private operators who have been licensed by government:

For the merged entity, he said that it must be fully privatized as government cannot compete with its licensees.

“ It will amount to conflict of interest on the part of government and will send wrong signals to investors not only in telecoms but in all other sectors of the economy that has been privatized by government. Government cannot compete” Adebayo said.

By the time it would have been completed, privatisation of NITEL would have acquired a

chequered history of its own. The sales bids started in 2000 when Investors International Limited, IIL of London bought 51% of its stake to become the core investor. IIL paid the non-refundable 10% deposit amounting to $131.7 million, but could not pay the remaining balance even after the deadline for the payment was extended. The sale was aborted in 2002.

In 2003, Pentascope, a Deutsch telecoms firm was appointed to prepare Nitel for sale, but this again was aborted following allegations of incompetence made against Pentascope. In 2005, Orascom of Egypt put in a bid of $256.53million for 51% of Nitel, but the offer was far below the market value of Nitel.

And in 2006, Transcorp of Nigeria offered to pay $500million for 51% stake in the company as its core investor, but in June 2009, the government cancelled the privatisation after the National Council on Privatisation found Transcorp in serious breach of the terms and conditions of the agreement in respect of both Nitel and M-Tel.

The last exercise, in which the New Generation consortium emerged the preferred bidder in February last year was not different. Shortly after the exercise, there was an outcry over the manner the process was conducted, followed by the controversial denials by some members of the consortium denying any knowledge of the deal.

China Unicom, a member of NGTC, took paid advertorial in some national dailies to deny being involved in the deal. This was speedily followed by that of another consortium member, Telcom New Zealand, which also denied being part of the Brymedia consortium that came third in the bidding process, adding to speculations that all was not well with the deal even though Brymedia also swiftly responded to the denial which it claimed was not true.

Denial by the Chinese firm cast a pall of doubt on the integrity of the process, though, the BPE swiftly rose up to defend itself by describing the claims as false.