Monday, June 22, 2009

Nigeria Sspends Sale of NITEL

Nigerian newspaper Vanguard reports that the federal government of
Nigeria has deferred the sale of the country's incumbent telco NITEL
and its mobile arm M-Tel, opting instead to introduce a project team
charged with bringing the two back to life before they are sold to a
new core investor. Additionally, Lagos-based Daily Independent writes
that the chairman of the technical management board of NITEL, Alhaji
Abubakar Mohammed, has tasked the staff of the company and its
wireless unit to ensure their networks are in operation within ten
weeks. Staff have called upon the technical board to address the
problem of funding, theft and vandalisation of equipment as well as
the payment of outstanding salaries.

According to TeleGeography's GlobalComms database, the federal
government sold its 51% stake in NITEL to local company Transcorp for
USD750 million in November 2006, retaining a 49% interest. Since then
the telco's initial 500,000 fixed lines in service have dropped to
about 45,000, its workforce has declined from 12,000 to just 2,000 and
the company is USD500 million in debt. In February 2009 Transcorp
agreed to divest part of its shareholding in the telco and in late
March the Bureau of Public Enterprises (BPE) announced it was offering
a 51% stake in the fixed line operator and 100% of its mobile unit. In
late May Nigeria's anti-corruption police charged the head of
Transcorp and two other employees with fraud for embezzling around
USD110 million belonging to NITEL and the following week the
government revoked the sale of the incumbent to Transcorp.

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