After 14 years and five failed attempts to sell the Nigerian Telecommunications Limited, the Federal Government on Tuesday finally handed over the beleaguered first national telecommunications company to a new core investor, the NATCOM Consortium.
At a ceremony attended by notable personalities in the privatisation circle, the Bureau of Public Enterprises handed over the instruments of ownership and licence of operation to the Chairman, NATCOM Consortium, Mr. Tunde Ayeni, who said over $1bn (about N2tn) would be required to revive the company.
Speaking at the ceremony Vice President Namadi Sambo, who chairs the National Council on Privatisation, said the formal handover was a clear indication that where there was focus and determination, there would be a way.
Sambo, who was represented by a member of the Technical Committee of the NCP, Mr. Emmanuel Amadi, listed the several failures in the past to privatise the company alongside its mobile subsidiary and added that the success this time round was a reflection of the determination of the NCP and BPE to increase competition in the telecommunications industry.
He said, “It was the realisation that Nigeria would not attain the desired economic growth without adequate reforms and liberalisation of the telecommunications sector that informed commencement of the telecoms sector reforms in 2001.
“These led to the attempted privatisation of NITEL and M-Tel through strategic/core investor sale to Investors International London Limited. Unfortunately, that flagship transaction failed as the preferred bidder could not meet the deadline for the payment of the purchase consideration.
“Failure of the first strategic investor sale led to the execution of a management contract with Pentascope in 2005. The management contract did not improve the operational and financial position of NITEL and M-Tel and was terminated.
“Orascom Telecoms emerged the highest bidder, with a bid of $256m, during the second privatisation attempt. Its bid was, however, rejected by the Federal Government as it was below the reserved price.”
The NCP in 2006 adopted the ‘willing buyer-willing seller’ strategy, which threw up Transnational Corporation as the core investor to shorten the transaction period since the financial position of NITEL was deteriorating.
Following the inability of Transcorp to turn around the fortunes of NITEL, the NCP on June 1, 2009 revoked the sale of the telecommunications company and its mobile subsidiary to it.
In another strategic/core investor sale in 2011, both New Generation Communications Limited and Omen International Limited that emerged the preferred and reserve bidders could not pay the purchase price and the transaction had to be cancelled again.
Consequently, the NCP approved the privatisation of NITEL and M-Tel through guided liquidation. It on November 11, 2013 approved the appointment of Chief Olutola Senbore as the liquidator of the companies.
At the financial bid opening on December 3, 2014, NATCOM emerged the preferred bidder with an offer of $252.25 bid price.
NATTAG, which had been prequalified by BPE to participate in the process, was disqualified as a result of the failure of the company to include a $10m bid bond as was prescribed in the Request for Proposal document.
Speaking at the handover ceremony on Tuesday, Ayeni said immense gaps and opportunities still existed in the Nigerian telecommunications market despite the competition in the industry.
According to him, with a good team of investors and management, NATCOM is ready to make the difference required to succeed.