The rebirth of Nigeria’s telecoms incumbent has come closer to realisation as the consortium that won the right to take it over last year has paid the final instalment in the US$252.5 million purchase price.
The NATCOM consortium emerged as the preferred bidder for Nitel and its mobile unit Mtel in December. It paid the government 30% of the cost in January and earlier this month transferred the balance, the Bureau of P ublic Enterprises (BPE) announced on social media on Friday.
Nitel is considered a moribund entity; its fixed and mobile networks are no longer operational. But NATCOM hopes to be able to breathe new life into the national operator after years of turmoil and failed attempts at privatisation.
Investors International (London) emerged as the preferred bidder for Nitel with a $1.32 billion offer in 2001, but the deal was cancelled when the outfit failed to make payments beyond its 10% deposit. The state engaged Pentascope International to manage Nitel, but cancelled the contract after 18 months as the telco’s fortunes declined.
In 2005 Orascom made a $260 million offer for Nitel, but the government deemed it too low. Orascom declined to raise its bid.
The following year Transcorp bought a 51% stake in the company, but control reverted back to the government after the outfit missed multiple payment deadlines. And a later attempt to sell Nitel to New Generation consortium for $2.5 billion also fell apart when the investor group could not make payments.
While NATCOM’s ability to pay for the telco has understandably raised hopes that Nitel will be able to relaunch, there is some discontent in Nigeria over the $252.2 million price tag.
However, officials at the BPE have repeatedly insisted that the deal represents a good price for an operator that has not been operational for a number of years and no longer has functional fixed or mobile networks.
The NATCOM consortium includes investment firms NATSPACE Telecommunication Investment and Prime Union Investment, and telco PCCW Global, among others. Ericsson Nigeria is the group’s technical partner but holds no equity.
