Tuesday, October 20, 2009

Incumbent Operators Barred From Nitel Sale

The Nigerian government has decided that the country's GSM network operators will not be allowed to buy the mobile assets of state-owned NITEL when it is eventually privatised. Although the government was originally looking to sell the company as a single entity, the government has now agreed to split the company into its component divisions and sell them separately.
Director-General of the Bureau of Public Enterprises, BPE, Dr. Christopher Anyanwu said that the decision was based on the advice of the National Communications Commission.
The four GSM networks, MTN, Etisalat, Zain and Glo will be allowed to bid for NITEL's landline assets, although Glo will only be allowed to bid for the CDMA and International gateway assets and licenses as it already holds a landline license.
NITEL's mobile division, M-Tel has languished while its private competitors have created a substantial mobile market out of nothing in just a few years. A recent Onda Analytics report on the sale said that under good ownership, NITEL could claw back almost 15% of the Nigerian mobile market by 2015.
Local company, Transcorp bought a 75% stake in 2006 in both companies for $750 million during a privatization sale, but the government reclaimed the stake earlier this year following several years of neglect.
Last week, Nigeria's Vice-President Goodluck Jonathan inaugurated a new interim board of directors to run the affairs of NITEL pending the sale to the new investor.

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