Exclusive: Boardroom battle erupts at 9mobile, threatens spectrum trade deal with MTN

A lingering boardroom rift at 9mobile has erupted into a full-scale battle this week, threatening plans by shareholders of Nigeria’s fourth largest mobile phone company to close a spectrum trade deal with rival MTN Nigeria.

Technology Times can confirm exclusively that the board crisis triggered by the battle for control of 9mobile has pitted Teleology Limited, led by Nasiru Ado Bayero, ousted chairman of the telecoms company, against LH Communications Limited, led by Thomas Etuh, current chairman of 9mobile.

The simmering shareholders' dispute that started earlier in the year, took a dramatic turn this week after Technology Times exclusively reported that 9mobile’s new shareholders were negotiating to trade the telecoms company’s spectrum with MTN Nigeria, the nation’s largest mobile phone company.

Fighting back: Nasiru Ado Bayero , ousted 9mobile chairman, and current Emir of Bichi in Kano State, who leads the interest of Teleology Limited in the telecoms business.

The simmering shareholders' dispute that started earlier in the year, took a dramatic turn this week after Technology Times exclusively reported that 9mobile’s new shareholders were negotiating to trade the telecoms company’s spectrum with MTN Nigeria, the nation’s largest mobile phone company.

The 9mobile board crisis that has also stalled plans by South Africa’s MTN Group to acquire the company’s spectrum for its local unit, MTN Nigeria, has also caught the attention of the Nigerian Communications Commission (NCC), the telecoms regulator, that is understood to have raised questions about the ownership tussle.

How 9mobile board dispute started

The board crisis has pitted Thomas Etuh, current 9mobile chairman and former Unity Bank chairman, who leads the interests of LH Communications Limited, against Nasiru Ado Bayero, ousted chairman of the mobile phone company and current Emir of Bichi in Kano State, who leads the interest of Teleology Limited in the telecoms business.

9mobile has not responded to the request by Technology Times to comment on several issues raised in the wake of the fresh board crisis.

Chineze Amanfo, 9mobile’s PR Lead and spokesperson of the telecoms company did not respond to our enquiry at the time of filing this report.

Following the removal of Bayero, Technology Times understands from regulatory filings, corporate information, internal records and interviews with several internal and external sources conversant with the current developments at the telecoms firm that a full-scale board dispute has erupted following the resistance by the ousted former chairman of 9mobile.

Following the emergence of Etuh, the former Unity Bank Chairman was to take steps to change the shareholding structure and commence moves to bring in new partners and explore the possibilities of a spectrum trade negotiations with MTN Nigeria as some of the quick wins for the new shareholders of 9mobile.

Taking charge : The board crisis has pitted Thomas Etuh , current 9mobile chairman and former Unity Bank chairman, who leads the interests of LH Communications Limited.

As of December 2023, Unity Bank’s records reviewed by Technology Times shows that Etuh had loan exposure totalling N16,613,537,159 to the bank where he was former chairman and director. TAK Integrated Agricultural Solutions Limited (TAK-IASL), his company with stakes in fertiliser production and broader agriculture value chain, was granted a N5,619,196,995 loan by Unity Bank, while another N10,994,340,164 was granted Lighthouse Capital Limited.

Etuh is leading the investment drive through LH Communications, said to be a spinoff of Lighthouse Capital, a Nigerian investment company, which is believed to be the current 9mobile chairman’s investment vehicle in the telecoms company.

Technology Times has been able to confirm Etuh’s link with Lighthouse Capital through Unity Bank’s regulatory filings that links the telecoms firm’s chairman and former director of the bank with investments company expected to drive his telecoms plans, particularly the spectrum trade talks with MTN Nigeria.

As of December 2023, Unity Bank’s records reviewed by Technology Times shows that Etuh had loan exposure totalling N16,613,537,159 to the bank where he was former chairman and director. TAK Integrated Agricultural Solutions Limited (TAK-IASL), his company with stakes in fertiliser production and broader agriculture value chain, was granted a N5,619,196,995 loan by Unity Bank, while another N10,994,340,164 was granted Lighthouse Capital Limited.

The 9mobile Board Chairman’s son, Emmanuel Etuh, serves as Non-Executive Director at Lighthouse Capital Limited, which as of December 2022, held 1,053,199,290 shares representing 9.01% of Unity Bank, where his father was former Chairman.

Since his emergence as 9mobile chairman, Etuh was said to have speedily taken steps with his new group to introduce new investors into the telecoms business in a bid to quickly close several quick-wins in the telecoms space.

Technology Times understands from telecoms industry insiders that talks are underway by Etuh’s group to bring Contents and Communications Services Limited (CCSL) on board as new investors to finance network upgrade and infrastructure expansion of 9mobile.

While details of the financials are yet to be confirmed, Contents and Communications Services Limited has commenced its due diligence on the telecoms business, including seeking access to the data room of the business from NCC to facilitate closing a deal with the 9mobile shareholders.

Caught in the middle: Juergen Peschel, 9mobile CEO

Juergen Peschel, 9mobile CEO, was also understood to have opened talk with NCC earlier in the year to inform the telecoms regulator that the board of the telecoms company has been reconstituted and its former chairman has been removed.

Peschel, who sought NCC’s clearance for the ownership change and control of 9mobile, informed the telecoms regulator that one of its key lenders, African Export-Import Bank (AFREXIM), has approved the change of control and ownership from Teleology Limited to LH Communications Limited.

One of the lenders said to be linked to African Capital is said to be seeking to convert the loan granted to 9mobile shareholders to about 71% equity in the telecoms business under a plan being pushed by the new board.

AFREXIM, a key lender of 9mobile facilitated a $251 million loan to the business, in addition to another $50 million from Keystone Bank, which was to help buoy the telecoms business for its network expansion and upgrade following the financial crisis that led to the emergence of Teleology as new owners of the telecoms business.

Technology Times learnt that NCC has again waded into the board crisis at 9mobile after receiving a letter from Bayero, the ousted 9mobile chairman, who has asked the telecoms regulator to disregard the request by the company’s CEO, for the change of company ownership from Teleology Limited to LH Communications Limited.

The 9mobile CEO, who was said to have also sought regulatory clearance for change of its board of directors when he informed NCC that the telecoms compan’s board held a meeting in June this year to dissolve its former board that led to the removal of Bayero as chairman.

In addition, the 9mobile CEO was said to have later requested NCC to approve the reconstituted board of the telecoms company after claiming that 9mobile’s key lender, AFREXIM Bank, has also given its consent to the change of control from Teleology Limited to LH Communications Limited.

According to people conversant with the developments, Bayero, the ousted chairman of 9mobile, who wrote in his capacity as EMTS (Emerging Markets Telecommunication Services Limited) Board chairman, is fighting back and has asked NCC to disregard the 9mobile CEO’s request to change the telecoms company’s ownership on ground that there was no board meeting on the said date as claimed by Juergen Peschel.

Aminu Maida: Executive Vice Chairman, Nigerian Communications Commission (NCC).

Chineze Amanfo, 9mobile’s spokesperson did not respond to allegations that Juergen Peschel, the 9mobile CEO, has faced allegations of corporate governance breaches over his alleged involvement in the boardroom crisis and other matters raised by Technology Times at the time of filing this report.

Bayero, and some parties, including some of the company’s lenders are resisting the dissolution of the board as allegedly reported by the company’s CEO to telecoms regulator, NCC.

The latest 9mobile boardroom crisis places another hurdle for the nation’s number four mobile phone company as its over 3000 workforce and over 13 million subscribers, lenders, regulators and telecoms market watchers weigh the impact of the shareholders’ dispute for the future of the telecoms business.

The latest board dispute comes in the wake of the exit of Mubadala Development Company, the largest shareholder of 9mobile (then Etisalat Nigeria Limited) that was caused by its inability alongside Etisalat of UAE, the technical partner, and shareholders of the telecoms company to renegotiate a $1.2 billion loan with a consortium of banks led by Access Bank of Nigeria.

The fast-rising Etisalat Nigeria, which was at the centre of a major financial crisis, was to sail through a difficult stage of corporate upheaval at the period it became target of an attempted hostile takeover by creditors due to its owners’ inability to repay the loan that financed a major network rehabilitation and expansion of its operational base in Nigeria.

Following the 2017 exit of its UAE investors, Mubadala and Etisalat, 9mobile (then Etisalat Nigeria), which controlled over 21 million subscribers before the crisis that hit the telecoms company, recorded subscribers’ church that left the business with about 15 million in the wake of the incident that was to result in takeover of the telecoms business by new investors.

As of January 2017, 9mobile, then fourth largest telecoms company in Nigeria by subscriber base, accounted for about 21 million subscribers or about 12.9% of the mobile market share . MTN Nigeria led with 60 million (40%) followed by Globacom, 37 million (24.6%) and Airtel Nigeria, 34.6 million (22.8%).

Teleology Limited came to the rescue of 9mobile after it emerged the new investor in the telecoms business and its new Board of Directors was chaired by Nasiru Ado Bayero in a group that included Adrian Wood, former MTN Nigeria CEO, among the new investors.

While seeking a new investor , Teleology, a private equity firm led by Wood, the former MTN Nigeria boss, emerged the preferred bidder with a $301 million bid in February 2018.

Bayero was to take charge of the new board that was composed after the expiration of the tenure of the former board appointed by the Central Bank of Nigeria (CBN).

In July 2017, the CBN and Nigerian Communications Commission (NCC), had appointed a Board of Directors led by Joseph Nnanna, CBN’s Deputy Governor in charge of Economic Policy at the time, pending the completion of due diligence of bid documents submitted by Teleology Holdings and 16 other bidders that participated in the bid process supervised by Barclays Africa.

“The composition of the new Board of Directors follows the issuance of final approval of no objection by the Board of the Nigerian Communications Commission (NCC) to the effect that the technical and financial bids Teleology submitted for 9mobile met and satisfied all the regulatory requirements,” Mohammed Edewor, Teleology spokesperson and a new non-executive director of the telecoms company, said at the time.

Teleology also said at the time that the emergence of the board led by Bayero showed that the “long process for the acquisition of 9mobile has reached a definitive end marking the beginning of a new era for the telecommunication company.”

9mobile’s first major financial crisis was to lead to the exit of Hakeem Belo-Osagie, EMTS pioneer chairman, and later cost the telecoms company significant loss of market share and subscriber churn that has left it with 13,791,079 subscribers representing 6.26% of Nigeria’s mobile phone subscriptions totalling 220,715,961 as of August 2023.

While Nigeria’s overall active phone lines reached 220,715,961, representing 115.63% in August this year, internet users was 159,034,717 while broadband connections was 86,993,472 representing 45.57% penetration of the high-speed data service across the country, according to official information by NCC.

Etisalat Nigeria at the time was the trailblazing last mover’s advantage to secure market share after Belo-Osagie was to convince the government of the day to sell off the licence at a princely sum of $400 million to the private-owned EMTS in January 2007.

Belo-Osagie’s licence deal was considered a premium price to pay in realising the businessman’s quest for a share of Nigeria’s telecoms market stakes when compared to the $285 million paid in the 2001 spectrum auctions by MTN Nigeria and Airtel Nigeria (then Econet Wireless).

Mike Adenuga, Nigerian businessman and Globacom chairman, subsequently paid $200 million for the multiservice second national operator licence (SNO) granted his telecoms group in 2003 by NCC.

Ernest Ndukwe, Nigeria’s telecoms regulatory chief at the time as EVC of NCC, who is now MTN Nigeria board chairman, announced on January 19, 2001, that the successful spectrum winners included Communication Investment Limited (CIL), Econet Wireless Nigeria Limited and MTN Nigeria Communications Limited at $285 million.