Urges bailout for ailing telecoms firms
THE fate of the comatose Nigeria Telecommunications Limited (NITEL) has been hinged on continued insensitivity on the part of government and lack of direction on how to handle the once known cash cow of the Nigerian economy.
The submission was made at the weekend by the Chairman of the Association of Licensed Telecommunications Companies of Nigeria (ALTON), Gbenga Adebayo, in Lagos during an interview with The Guardian.
Adebayo said as an industry person, he thinks government was playing politics with the future of NITEL, stressing that if government decides to sell NITEL, it should be sold for the objective of keeping it alive, not for the objective of economic returns.
“What has happened in the last 10 years, where there has been repeated failed attempts by government to privatise NITEL, is like government wants to make money and want to make cool money from the sale of the telecommunications firm and this has continued to drag the fortunes of the company behind,“ he stated.
According to him, the bid price for NITEL was too high, adding that the company was too big for one player to purchase.
“So I see that in today�s world, no investor would want to invest in such a big entity like NITEL, because there would be need for major re-engineering. You will need to build a new entire infrastructure, because the one on ground has depleted and there are so many legal cases to also tackle. So how long will it take you to invest in such and recoup your investments.
“So I, as an industry player, my position would be that government would need to slice NITEL into small entity, then it can be more attractive for intending buyers and operators, who are also interested in some certain areas of NITEL to buy into it.“
On possible move to liquidate the telecommunications company in the event of privatisation failure, the ALTON boss said, “Well NCP has the numbers, I don�t have. But what I will say if NITEL is liquidated, the question to them would be what did they make out of NITEL. If liquidating it would make the price of sale of the telecommunications firm more attractive to buyers that might be away to go, but if liquidating it is to destroy and dismantle it completely, that is not advisable,“ he stressed.
Adebayo emphasised the need for government�s bailout of ailing telecommunications firms in the country.
According to him, “there may be a need for the NCC to go cap-in-hand to the government to bail out some sorts for the ailing telecoms operators. The reality is that the size of the telecoms operators in the country is getting smaller and smaller. ALTON, three years ago, had more service providers than it has now.“
Apart from advocating for a bail-out, Adebayo further said that governments at all levels, should consider eliminating all kinds of taxes and levies such as Right of Way and Environmental Impact Assessment charges.
“We are not saying they should not charge, but charges should be administrative, meaning that it should be something to reflect the level of services provided by the government and that is just to grant the administrative approval. Today, it looks like government charges these levies as a way of revenue generation and that should not be so,“ he said.
Meanwhile on the NITEL�s bid, there are possible indications that come Friday, June 10, the extended deadline given to Omen to revalidate its bidding may be withdrawn if it fails to meet up with the requirements. It will be recalled that the current transaction started in September 2009.
A source monitoring the process hinted that, should Omen failed to meet this weekend�s deadline, the Bureau of Public Enterprises would have to start afresh a new privatisation process for the national telecoms firm or consider other possible options, including outright liquidation of the comatose telecommunications company.
Omen had, through a letter dated March 29, requested for an extension of revalidation of its bid for NITEL/Mtel till after the May 29 inauguration of President Goodluck Jonathan. He ended up as the reserve bidder at the February 2010 financial bid, having offered $956.9 million to acquire the telecom firms.