Regulators step up process to close 9mobile sale

Regulators have stepped up plans to close the ongoing sale of 9mobile, raising hopes for the fortune of the fourth largest mobile phone company by subscriber base in Nigeria.

Technology Times learnt that the Nigerian Communications Commission (NCC) that regulates the telecoms industry has opened talks with Teleology Holding Limited that emerged preferred bidder for 9Mobile, to ensure that the transaction meets regulatory compliance.

NCC and its banking sector cousin, Central Bank of Nigeria (CBN) intervened to avert the takeover of 9mobile by a group of creditor banks over $1.2 billion debts owed by the mobile phone company. The regulators later appointed Barclays Africa to oversee the sale of 9mobile to new investors expected to turn around the business.

The two regulators are now in a race against time to salvage 9mobile after it was hit by massive “subscriber haemorrhage” triggered by the debt crisis that also resulted in the pullout of key Arab investors: Mubadala and Etisalat of the UAE.

Following the emergence of Teleology as the preferred bidder, the ball has now shifted to the NCC court for the regulator to evaluate the company hoping to acquire controlling stakes in 9mobile.

Teleology Holding Limited, a company promoted by Adrian Wood, a former MTN Nigeria CEO, which emerged preferred bidder in the 9mobile sale is undergoing regulatory checks by the Abuja-headquartered telecoms industry watchdog, according to people conversant with the situation.

Barring any unforeseen development, Teleology Holding Limited is set to take over 9mobile after the transaction came under criticism by rival bidders, including Smile Communication Limited, the communications business owned by Irene Charnley, a former MTN Group Director and Arab investors.

Following the emergence of Teleology as the preferred bidder, the ball has now shifted to the NCC court for the regulator to evaluate the company hoping to acquire controlling stakes in 9mobile.

The Nigerian Communications Act 2003 (NCA) that established NCC grants the telecoms regulator the broad powers to regulate the communications sector in the country.

With respect to Teleology, the telecoms watchdog is expected to perform a corporate health check on the preferred bidder as well as its financial and technical capabilities to meet financial obligations for the 9mobile sale and also turn around the mobile phone business.

The process will also include procedures guiding the transfer of the 9mobile business and review of terms and conditions for the licensing of bouquet of frequency spectrum assets held by the mobile phone company.

Meanwhile 9mobile is fast suffering subscriber loss sparking fresh fears about its future as regulators battle to save the business following difficulties triggered by its debt crisis.

Regulators now know that they have to also salvage 9mobile from imminent threat posed by massive subscriber loss that has hit the mobile phone company following its debt crisis, analysts say.

While the government regulators intervened to save 9mobile from the takeover by creditor banks in the initial instance, the unending sales process has extended the threats to the mobile phone business in the competitive telecoms environment in Nigeria.

Regulators now know that they have to also salvage 9mobile from imminent threat posed by massive subscriber loss that has hit the mobile phone company following its debt crisis, analysts say.

By April this year, the GSM market has recorded 160,081,051 active lines split among MTN Nigeria (65,209,222); Globacom (39,523,811); Airtel Nigeria (39,199,383) and 9mobile (16,148,635), according to NCC’s latest market information.

By that period, 9mobile’s share of the market has dropped to 10.09% compared to the competition: MTN Nigeria (40.74%); Globacom (24.67%) and Airtel Nigeria (24.49%).

9mobile subscriber base has dropped from its peak 23,492,214 by September 2015 to 16,148,635 by April this year compared to MTN Nigeria (65,209,222); Globacom (39,523,811) and Airtel Nigeria (39,199,383), within the latter period.

From Etisalat Nigeria to 9mobile

9mobile, which was launched in 2008 originally as Etisalat Nigeria when the administration of then President Olusegun Obasanjo granted approval for the sale of licence to Emerging Markets Telecommunication Services (EMTS) to become the fifth GSM operator in the country.  

Hakeem Belo-Osagie, the Chairman and lead promoter of the EMTS business was to swing a deal under which the Nigerian government waived the traditional auction option to sell the digital mobile licence to the company for $400 million.

“EMTS is a Nigerian company duly incorporated under the laws of Nigeria in partnership with Mubadala Development Company and Etisalat of the United Arab Emirates. Mubadala acquired the Unified Access Licence from the Federal Government in January 2007. The licence includes a mobile licence and spectrum in the GSM 1800 and 900 MHz bands at a price of $400 million”, Belo-Osagie was to tell a packed hall on March 14, 2008, the milestone day that marked the official media presentation of the 5th GSM brand in the country.

At the event, Belo-Osagie was to bring clarity to the confusion over what he cited as the interchangeable references to the mobile operator as EMTS, Mubadala or Etisalat “in various quarters.”

According to him, “Etisalat has acquired a 40% stake in EMTS and will operate the licence. Etisalat is a renowned telecommunications services provider and was a natural choice as operator based on its outstanding performance in the Middle East and various parts of Africa. As we go forward, you will see and know us as Etisalat Nigeria.”