Nitel sale sparks international interest

Renewed efforts to sell Nigeria Telecommunications (Nitel) have sparked interest from international operators almost two months after the government cancelled the sale of the company to Transnational Corporation (Transcorp).

Transcorp had failed to put together a plan for a technical operator for the company -- one of the conditions of the sale. Meanwhile, the Bureau of Public Enterprise (BPE) has once again put Nitel and its GSM (Global System for Mobile Communications) subsidiary, M-Tel, up for bidding to save the companies from collapsing.

Nigeria is the third country in Africa, after Zambia and Ghana, to put its national carrier up for sale after failing to recapitalize and make it competitive.

Following the revocation of the license of Transcorp, an interim management board was set up to manage the affairs of Nitel until an investor is found. But the majority of the interim management board, whose key mandate includes facilitating the privatization of Nitel, is demanding that the company be audited before it is sold.

The board is also in dispute over settlements for pensioners, dues and salary arrears of almost a year, and the company's debt.

BPE spokesman Joe Anichebe said Nitel will be sold to a competitor who will be able to manage and turn the company around.

The renewed sale of Nitel is, however, marred with accusations that BPE has not been transparent in selecting a capable company to buy Nitel. The BPE is being accused of favoring Globacom, the country's second national carrier.

Some Nigerians are demanding that if Globacom is allowed to run Nitel, it must be backed by an international operator to ensure there is enough money to run the company.

BPE has said it has written to the Nigeria Communications Commission (NCC), the country's telecom sector regulator, asking whether Globacom should be allowed to bid for Nitel. To date, the NCC has not responded to BPE's request and it's not clear whether Globacom is among the five operators that have so far submitted bids for Nitel.

"Our duty is to make sure that we get a credible company that will run Nitel, and this is why we have written to NCC about Globacom," Anichebe said.

 When the deal to sell Nitel was finalized three years ago, Nitel was billed as Africa's next telecom giant, as more than 100 million out of the population of more than 150 million are potential customers.

Transcorp had agreed to inject capital and turn around the fortunes of the financially troubled company. Transcorp had also promised to inject more than US$128 million into Nitel within 100 days of its takeover in order to address the immediate financial liquidity issues facing the company.

Apart from financial problems, Nitel has also been facing leadership wrangles, labor unrest and a debt of $500 million.

Nigeria is Africa's biggest telecom market in terms of investment and subscribers. The country's continued growth is expected to trigger more intense competition among a growing number of operators.