Who Buys 9mobile?

9mobile logo

By Oji Odu

As the newly rebranded 9mobile, Nigeria’s fourth largest telecommunications firm with over 20 million subscribers, some of who are at crossroads on remaining on the network, continue to find ways of resolving its myriad problems and put the company on a sound footing, the race to buy the company has continued to increase. This followed the December date to know the preferred buyer according to the Nigerian Communications Commission (NCC).

In line with this, Chief Executive Officer (CEO) 9mobile, Boye Olusanya, has asked the telecoms regulator for concessions on spectrum and foreign exchange access to shore up its revenues ahead of finding new investors.

Recently, Central Bank Governor, Godwin Emefiele said 9mobile had appointed advisers to find new investors after regulators stepped in to try to save the company from collapse due to it big debts. Citigroup and Standard Bank have been appointed to manage a sale process and three major investors have shown interest.

In a similar vein, NCC Evecutive Vice Chairman, Umar Dambatta said that  Olusanya, has asked the telecoms regulator for concessions on spectrum and foreign exchange access to shore up its revenues ahead of finding new investors. Olusanya asked the NCC to revisit its floor price on data, interconnect rates and national roaming fees in order to help the country’s mobile operator meet its obligations after a meeting with the regulator.

“We want to see a viable and thriving 9mobile,” Danbatta said, adding that he wanted to safeguard investors, subscribers and employees.

In a statement, the NCC boss revealed that more than $2 billion Foreign Direct Investment (FDI) by Mubadala of UAE was at stake, while 20 million subscribers and over 2,000 workers would have been affected if the NCC had not intervened.

9mobile has a 14 percent share of Nigeria’s highly competitive mobile telecoms market. South Africa’s MTN is the market leader with 47 percent, Nigeria’s Globacom has 20 percent while Airtel’s Nigeria has 19 percent.

Etisalat International’s CEO, Hatem Dowidar, while speaking on its decision to exit the Nigerian market said that it had been unsuccessful at converting some of its dollar debt to local currency and had decided to exit the market, giving the Nigerian business notice to phase out the brand.

As moves to stabilise 9mobile before sale, CBN Governor revealed that the embattled telecommunications firm’s revenue was stable. He said the company had made N16 billion naira ($52.5 million) in June 2017,  adding that the company had not lost subscribers due to its debt problems.

Meanwhile, 9mobile’s CEO, Olusanya,  has said he is focused on getting the company back on track to make profit, while working on plans to raise new capital. He also said the company was also open to new investors.

Findings by The Source reveal that Virgin Mobile, BUA Group and Vodacom may be lining up bids to buy Nigeria’s 9mobile. The three companies are said to be putting finishing touches to their bids in respect of acquiring the 45% stake hitherto held by Etisalat of the UAE.  Interim CEO of the company, Olusanya had earlier hinted this during the launch of 9mobile new brand name that it was open to new investors.   Virgin Mobile UK is one of the largest broadband operators in Europe, and is a subsidiary of Liberty Global, an American media conglomerate. Virgin Mobile was founded in 1999 as a joint venture between One2One and Sir Richard Branson’s Virgin group, before its sale to NTL Telwest in 2006, and subsequently Liberty Global in 2013.

Vodacom, which is listed on the Johannesburg Stock Exchange (JSE) was founded in South Africa in 1994, and has operations in over 40 African countries including Kenya, Nigeria, Ghana, Zambia and Angola.

BUA group was founded in 1988 by Abdulsamad Rabiu. The group’s operations are broadly divided into agriculture and infrastructure with BUA holding a controlling stake in Cement Company of Northern Nigeria (CCNN). In addition, BUA is into sugar refining and production of edible oil.

Virgin Mobile UK is one of the largest broadband operators in Europe, and is a subsidiary of Liberty Global, an American media conglomerate. Virgin Mobile was founded in 1999 as a joint venture between One2One and Sir Richard Branson’s Virgin group, before its sale to NTL Telwest in 2006, and subsequently Liberty Global in 2013. Virgin Mobile in January this year became the third GSM network provider in the UAE.

However, none of the reported bidders has confirmed these reports on their websites or in their respective stock exchanges. Virgin Mobile in January of this year became the third GSM network provider in UAE.

Unconfirmed reports suggest Globacom Chairman Mike Adenuga may be interested in acquiring 9mobile Nigeria.

Globacom may be interested in acquiring Etisalat to cement its number two position in terms of number of subscribers.  Data from the Nigerian Communications Commission (NCC) for the period ended March 2017 show MTN Nigeria is currently the largest network in the country, with 60.3 million subscribers.  Globacom is the second largest with 37.3 million subscribers, Airtel, 34.6 million and Etisalat currently has about 20 million subscribers. Therefore, combining both entities would close the gap between MTN and Globacom.

Industry analysts believe that with 9mobile’s competitive advantage in its data services a possible merger with Globacom would enable the company to offer cheaper data services, a feat that would attract more customers to the network. Globacom currently offers some of the cheapest data plans in the country as it owns a dedicated fibre cable and also subsidizes its voice services.

But, the other operators-MTN and Airtel may kick against the deal as it could lead to price fixing between the three major GSM operators in the country. This merger could also give undue advantage to Globacom, which got a Second National Carrier (SNC) licence from the NCC. The merger would also lead to job losses in Etisalat, since it is the smaller firm. Globacom is yet to issue an official statement to this.

What about the Dangote interest? Latest board changes in 9mobile have sent some Nigerians wondering if this is step towards a takeover by Nigerian billionaire, Aliko Dangote.

Etisalat Nigeria had announced board changes that saw its former Chairman, CEO and CFO resign. Joseph Nnanna was appointed Chairman in place of Hakeem Bello Osagie. while Matthew Willsher and Olawole Obasunloye former CEO and CFO respectively were replaced by Boye Olusanya and Mrs. Funke Ighodaro respectively.

However, Ighodalo’s profile has flagged off suspicions of a Dangote takeover. She was before now the Chief Financial Officer of Tiger Brands Limited. Tiger Brands is a South African company that had majority shares in Dangote Flourmills Plc. Even for stark is the work history of one of Boye Olusanya, 9mobile’s new CEO.

The Magazine’s findings reveal that Olunsanya was before now the “Chief Business Transformation Officer,” Dangote Industries Limited, responsible for management of all enterprise-wide projects in the Group. He was also Managing Director, Dancom Technologies Limited with responsibility for managing all the telecom assets and the IT Infrastructure.

With the CEO of a company owned by Dangote now the CEO of 9mobile, can the connection be a coincidence?

The Magazine’s further findings also revealed that in 2010, Etisalat bought a 3G license which it is currently using to trade in Nigeria from Alheri Mobile Services Ltd, which is(was) a subsidiary of Dangote Industry Limited. This was Etisalat’s comment when they acquired the license in 2010.

“We are delighted to acquire the 3G license, which is an essential element of our plans for further developing the market for mobile broadband in Nigeria….There is pent-up demand in Nigeria for broadband, and we intend to be the leader in satisfying it,”. Etisalat

Dangote can, indeed, be said to have a seat on the board of 9mobile. Is it possible that with his ‘people’ in strategic positions in 9mobile, this successful investor will not be interested in Nigeria’s telecommunications sector? Although it may be too early to predict who may be the preferred bidder because other interests are expected in the race.

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