Analysts seek FDI consideration in 9mobile sales

Ahead of the sale of 9Mobile, some analysts in the telecommunications sector are of the view that the broader interests of the telecom sector and the larger economy may be best served in its ongoing sale if a fresh telecom player with the demonstrated ability to source offshore capital is selected. 

Of course such a player, according to them, must also possess demonstrable technical competence. The December 31, 2017 deadline set for the sales may not be feasible due to some issues that must be sorted out; however, those privy to the process said the curtain is expected to be drawn on the sale of 9mobile in mid-January, 2018. 

The bidding process is currently in its last stage, five major organizations are in the final shortlist in the 9-Mobile bid, these includes Globacom, Airtel, Helios, Teleology and Smile Communications, respectively. Globacom possesses a Second National Operator license, obtained in 2003, while Airtel is the Nigerian subsidiary of Bharti Airtel. Smile Communications operates a 4G/LTE network while Helios is a private equity firm. 

Teleology is made of a number of professionals with several dozens of years of international telecom experience, including experience in Nigeria, mainly under the auspices of MTN. While some analysts believed that the experience of Globacom and its financial war chest in the Nigerian market could serve as a major advantage, others believed that a Greenfield operator, without a current presence in Nigeria may be best placed to add value to the industry and economy at large, because it would be forced to source financing internationally in order to compete effectively with current players in the market. 

An analyst with PriceWaterhouseCoopers (PwC), who does not want his name mentioned because of the sensitivity of issue, expressed the view that the telecom industry is currently in a severe crisis. According to him, many do not realize this, but if the contribution of the telecom sector to Nigeria’s GDP is declining from 9.3 per cent in 2016 to 7.4 per cent in 2017, according to the Nigerian Bureau of Statistics, (NBS) at a time when the economy is experiencing positive growth, it is an indication that there is a fundamental problem with the telecom sector. 

Still making reference to the NBS, he said the Nigerian economy experienced year-on-year GDP growth of 1.40 per cent between 2016 and 2017, “the current scenario is alarming and should send a signal to the regulators that the sale of 9mobile must be treated as a national priority.


Guardian