Home Big Story Market rebound of Ntel, Nigeria’s pioneer telco, faces regulatory hurdle at NCC

Market rebound of Ntel, Nigeria’s pioneer telco, faces regulatory hurdle at NCC

Market rebound of Ntel, Nigeria’s pioneer telco, faces regulatory hurdle at NCC
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Plans by Ntel, Nigeria’s Pioneer National Operator, to roll out commercial services in the telecoms market have faced a major regulatory obstacle at the Abuja-based Nigerian Communications Commission (NCC), the telecoms industry regulator.

Technology Times can authoritatively confirm that NCC has issued fresh conditions to NATCOM, promoters of the investment consortium that bought the assets of NITEL that now trades under the Ntel brand, including new payment requests, before the telecoms company (telco) can be permitted to return to the Nigerian telecoms market.

While efforts are underway by Ntel owners to return the nation’s pioneer phone company to the market, the regulator’s fresh demands to NATCOM is causing concern within government circle after Professor Umar Danbatta, the new Executive Vice Chairman at NCC allegedly threw up the new deal.

NATCOM must pay, Professor Umar Danbatta, Executive Vice Chairman at NCC, insists
Professor Umar Danbatta, Executive Vice Chairman at NCC…insists that NATCOM must pay

On the other hand, the Bureau of Public Enterprises (BPE), the nation’s privatisation midwife agency, had prior to the sale of NITEL, committed to an “unencumbered transaction” when it provided comfort at the time to bidders that the assets of the phone company, sold under guided liquidation, will be sold with valid operating licences and frequency spectrum.[quote font=”georgia” font_size=”22″ font_style=”italic” align=”right” bgcolor=”#” color=”#” bcolor=”#” arrow=”yes”]“The importance of fulfilling such covenants is to enhance investor confidence in the Nigerian economy and ensure participation of investors in future offers of investment opportunities by Nigeria through the BPE”, the BPE told NCC in a letter, an anonymous NCC source also confirmed to Technology Times.[/quote]

Under the pact, assurances were provided by the Presidency, the BPE and NCC to ensure that winning investors will be granted licences and frequency spectrum for 20 and 15 years for NITEL and its mobile business unit, MTEL respectively. These time frames represent the current regulatory licensing tenor prescribed by the NCC rules.

The BPE comfort also included debts owed to NCC by the government-owned telcos, NITEL and MTEL, between the period of year 2006 to 2014, which were considered as dormancy period during which the “companies were not only non-operating, but were also not generating any revenue, comatose and lacked capacity to address any indebtedness.”

File photo shows opening bid for NITEL at the time
File photo shows opening bid for NITEL at the time

More importantly, the telecoms regulator is being made to understand by sister agency, BPE that the fees being asked from both NITEL and MTEL cannot be “ascertained as both companies lacked annual audited accounts as they have been out of operation and comatose since the period.”

According to a government source, based on the “covenant by BPE”, NATCOM had allegedly provided a technical roadmap plan to ensure that it would be able to guarantee a market rebound for the two bundled dormant phone companies, “based on Federal Government’s deposition that the successful company in the bids will have licences for 20 and 15 years for NITEL and MTEL respectively.”

A senior government official at the Ministry of Communication, which oversees the telecoms and information and communication technology (ICT) sectors, who confirmed to Technology Times anonymously, citing that he is not permitted to comment on the matter, says that the issue is currently receiving attention at the Presidency, “because NCC has refused to shift ground on the matter.”

According to documents sighted by Technology Times, the new NCC leadership under Professor Danbatta, is insisting that the assurance of “approval of licence at no cost to the core investors” made by BPE will no longer apply at the Abuja-based telecoms regulatory agency.

Irrespective of the promises made to bidders by BPE at the time the sales of the telcos was closed, NATCOMS must now shell out new payments for licence and frequency spectrum renewals before the new Ntel can be allowed to roll out commercial operations, NCC has insisted.

Top officials of the Ministry of Communications, which by civil service tradition oversees the independent telecoms regulator, NCC are worried by the development, just as the privatization midwife agency, BPE, “which had secured approvals from Mr President at the time, the Minister and then NCC leadership.”

According to a government memo sighted on the fresh payment demands being made by NCC to NATCOM, BPE has expressed concern over the regulator’s fresh demands citing that they pose a credibility issue for promises made to NITEL bidders.

“The importance of fulfilling such covenants is to enhance investor confidence in the Nigerian economy and ensure participation of investors in future offers of investment opportunities by Nigeria through the BPE”, the BPE told NCC in a letter, an anonymous NCC source also confirmed to Technology Times.

Learning from several failed attempts to sell NITEL in the past, the national privatization agency, BPE, was said to have received all the necessary approval at top government levels to ensure that the commercial environment for the privatization of the two bundled telcos, NITEL and MTEL, “was sanitised at no cost to the bidder to ensure investor confidence to mitigate against several failed attempts in the past”, the telecoms regulator was told.

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