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Tag: Etisalat

  • Updated: 9mobile:Court nullifies sale of Etisalat

    A Federal High Court in Abuja has set aside the sale of telecommunication firm, Etisalat International Nigeria Limited (9mobile) to Teleology Nigeria Limited.

    Justice Binta Nyako, in a ruling, voided all steps taken in relation to the exchange of ownership of Etisalat despite pending orders for maintenance of status quo, restraining parties to a suit, involving investors and other stakeholders in the company, from destroying the res (subject matter).

    Justice Nyako, who noted that parties were all aware of the existence of the suit, the defendants having been served between April 24 and 27, 2018 with the originating process, faulted the sale, as claimed by the plaintiffs in a motion filed on November 16, 2018

    The judge held: “Any action that has been taken concerning the rest of this litigation from the 25th day of April, which is earlier in time, should revert to the position, as of the res, to its 25th day of April 2018.”

    The ruling, given on April 1, 2019 (a copy of which was sighted on Thursday) was in a suit, marked: FHC/ABJ/CS/288/2018 filed on April 6, 2018 by two major investors in Etisalat, Afdin Ventures Limited and Dirbia Nigeria Limited.

    Afdin and Dirbia, whose investments in Etisalat is estimated at $43,033,950, had sued to retrieve their investments on the grounds that they were aggrieved, having been excluded from the decision making process of the company.

    Defendants in the suit are: Karington Telecommunication Ltd, Premium Telecommunications Holdings NV, First Bank of Nigeria Plc, Central Bank of Nigeria, Etisalat International Nigeria Ltd and Nigeria Communication Commission (NCC).

    The plaintiffs stated, in a supporting affidavit to the motion dated November 16, 2018, that they resorted to praying the court to void the sale of Etisalat, upon learning that the defendants have proceeded to conclude the transfer the company’s ownership despite the restraining orders made earlier by the court.

    Read Also: Court warns CBN, NCC on Etisalat

    They said: “In 2009, the plaintiffs/applicants purchased a total of 4,303,391 class “A” shares from the 1st, 2nd and 5th defendants (Karlingtton, Premium Telecommunication and Etisalat International) at the rate of $43,033,950 only, and were issued with share certificates.

    “In 2010, the defendants rebranded Etisalat Nigeria Limited to 9mobile and entered into negotiations with Smile.com and Glo Network to transfer its licence without recourse to the plaintiffs.

    “When the plaintiffs became aware of the purported transaction, they filed this suit along with two applications namely: motion ex-parte and motion on notice, seeking for an order of injunction to restrain the defendants from going ahead with the transaction.

    “When this suit came up for hearing on the 17th of April, 2018, this honourable court ordered parties to maintain status quo-pending the determination of the motion on notice.

    “Notwithstanding the aforementioned order, the defendants continued negotiations with

  • Court stops planned sale of Etisalat

    A Federal High Court in Abuja has halted the planned sale of the troubled telecommunication firm, Etisalat (now 9Mobile) following opposition to the move by some aggrieved shareholders.

    The shareholders – Afdin Ventures Limited and Dirbia Nigeria Limited – who claimed to be major investors, claimed they were left out in the firm’s decision making and demanded a refund of their invested funds estimated at $43,330,950.

    They have filed a suit to that effect before the Federal High Court, Abuja.

    The suit marked: FHC/ABJ/CR/288/2018 has Karlington Telecommunications Limited, Premium Telecommunications Holdings NV, First Bank of Nigeria Plc, Central Bank of Nigeria, Etisalat International Nigeria Limited and Nigerian Communication Commission (NCC) as defendants.

    On April 17, Justice Binta Nyako, after hearing the plaintiffs’ lawyer, Mahmud Magaji (SAN), moved an ex-parte motion and ruled that “an order is made for the maintenance of status quo as at today.”

    Justice Nyako, who said “the defendants ought to be heard,” also ordered the service of processes on them (the defendants), including the 3rd and 5th (First Bank and Etisalat), whose addresses are outside the jurisdiction.

    The judge, who also ordered that “the writ be marked as concurrent,” adjourned till May 14 for mention.

     

  • ntel: Etisalat’s exit hampering FDI, local lending

    The Managing/Chief Executive Officer, ntel, Ernest Akinlola has lamented that the exit of Etisalat from the country has compounded funding in the telecoms sector as both foreign direct investment (FDI) and local lending  are stalled.

    Speaking as a guest at a forum organised by the Nigeria Information Telecommunication Reporters Association (NITRA) in Lagos at the ntel weekend, Akinola also said since launched operation, it has basically faced challenges such as the fact that 4G-long term evolution (LTE) was well ahead of its time while its launch by operators had not really improved LTE uptake or awareness across the country.

    ntel emerged from the privatisation of former state-run telco, NITEL and its mobile arm Mtel.

    He also said there was limited availability of 4G-LTE devices, especially VoLTE-capable devices, while most 4G-capable devices are built to work with 4G-LTE data and2G/3G voice. Added to these challenges were the general economic conditions of the country that saw the naira taking a monumental tumble against the US dollar, peaking at N510 in 2016. There was also the fall in the growth of gross domestic product (GDP) and purchasing-power-parity.

    He said these challenges notwithstanding, ntel is preparing to roll out national roaming services

    (2G and 3G) with two foremost operators, 9mobile Nigeria and MTN Nigeria, adding that service is expected to go live in the second quarter (Q2) of 2018.

    According to Akinola, the benefits of the national roaming service include immediate coverage parity, service backward-compatibility (4G to 3G/2G), handset compatibility and speed to scale.

    “We will be rolling out more of our 4G LTE services to the underserved and unserved areas leveraging a national roaming plan.

    “The Nigeria Communication Commission (NCC) has successfully carried out a field test on our roaming plan in conjunction with 9mobile and has approved that we are good to go; we actually met with all the Tier 1 operators on a round table before with 9mobile on this plan. What subscribers should know is that the ultimate goal is to improve service quality, customer satisfaction and a win-win for the collocation sharing operators.

    “So far, we have about 72 per cent data and voice coverage in Lagos, close to 100 per cent in the cities of Abuja and port Harcourt. These we plan to boost through this roaming plan and on a wider scale with new management team on board and more funding secured, we will embark on more subscribers-centred projects to serve the Nigerian populace better.

    “To also get in touch with cities and hinterland coverage, we will be adopting lower denominations of recharge card sales and open dealer outlets. We know that as we replicate our virtual operations to the contemporary system, more business would be opened for the value chains.”

    He said ntel is growing at more than twice its speed last year, arguing that the telco recorded 167 per cent compounded average growth in customer numbers between last October and last month.

    He said: “We have recorded 50 per cent overall growth between October 2017 and February 2018.”

    Speaking on  funding and investment for future expansion, Akinola explained that current funding and investment initiatives are through strong shareholder support to bridge immediate funding gaps.

    He added however that external party investment (debt/equity) would also be harnessed to boost ntel’s efforts to bring affordable and abundant broadband to all Nigerians.

  • Reps to probe Etisalat’s collapse

    Reps to probe Etisalat’s collapse

    The House of Representatives yesterday mandated its Committee on Telecoms to probe the collapse of Etisalat Nigeria (now 9mobile).

    According to the lawmakers, one of the reasons for the probe is to protect the interests of Nigerian subscribers and other stakeholders.

    The resolution of the House was sequel to the adoption of the prayers of a motion by a member, Hon. Saheed Akinade-Fijabi.

    The lawmaker noted that Etisalat Nigeria (now 9mobile) commenced business in Nigeria in 2009 after acquiring the unified access licence spectrum in the GSM 1800 and 900 megahertz (Mhz) bands from the Nigeria Communications Commission (NCC) in January 2007.

    He said it thus became Nigeria’s fourth largest telecoms network operator with over 21 million subscribers and controlling about 12.9 per cent of the country’s market share.

    He said: “Etisalat Nigeria was formerly owned by three shareholders, namely Emirates Telecommunications Group Company (40 per cent), Mubadala Development Company, Abu Dhabi (45 percent) and EMTS Holding BV (15 per cent);

    “Aware that Etisalat Nigeria obtained a loan of $1.2 billion (N377.4 billion) in 2013 from  13 Nigerian banks which involved a foreign-backed guaranteed bond to finance a major network rehabilitation, upgrade and expansion of its operational base in Nigeria;

    “Etisalat Nigeria had so far paid about half of the initial loan amounting to about N504 billion with total outstanding sum of about $574 miliion but had reneged on its debt servicing obligations after the intervention of the NCC and the Central Bank of Nigeria (CBN) to restructure the loan and new repayment deadline.”

    Fijabi expressed concern that the failure of Etisalat to meet its debt servicing obligations with the banks since 2016 resulted in its foreign major shareholders pulling out and eventual take-over of the company by the banks.

    He however said the take-over of Etisalat, which was renamed 9mobile by the banks, is a clear violation of Section 38 (1) of the Nigerian Communications Act, 2003.

    According to him, the Act  provides that “the grant of a licence shall be personal to the licensee and the licence shall not be operated by, assigned, sub-licensed or transferred to any other  party unless the prior written approval of the Commission has been granted”;

    When the motion was put to a vote by the Deputy Speaker, Yussuff Lasun, it was passed by a majority support of lawmakers and referred to the House Committee on Telecoms.

    The Committee is to report back in eight weeks for further legislative action.

  • Reps to investigate collapse of Etisalat

    Reps to investigate collapse of Etisalat

    The House of Representatives has mandated its Committee on Telecommunications to investigate and ascertain the circumstances which led to the collapse of Etisalat Network so as to protect Nigerian subscribers’ interest.

    This was sequel to a motion by Rep. Saheed Akinade-Fijabi (Oyo-APC) on Thursday in Abuja.

    Moving the motion, Akinade-Fijabi expressed worry that the inability of the Etisalat to meet its debt servicing obligations with 13 banks forced its foreign shareholders out of the firm.

    He said the company was eventually taken over by the banks.

    Akinade-Fijabi explained that the take-over was against the letters and spirit of the Nigerian Communications Act.

    “The take-over of Etisalat which was renamed 9mobile by the banks is a clear violation of section 38(1) of the Nigerian Communications Act 2003.

    “The Act provides that the grant of a licence shall be personal to the licensee and the licence shall not be operated by, assigned, sub-licensed or transferred to any other party.

    “The Act further states that the licence could only be transferred if there is prior written approval by the community.’’

    According to the the lawmaker, Etisalat Nigeria paid almost half of the initial loan amounting to about N504 million dollars.

    “Etisalat Nigeria obtained a loan of 1.2 billion dollars (N377.7billion) in 2013 from 13 Nigerian banks, with a foreign guaranteed bond to finance a major network rehabilitation, upgrade and expansion of its operational base in Nigeria.

    “The company so far paid about half of the initial loan amounting to about 504 million dollars but it had reneged on its debt servicing obligations after the interventions of the Nigerian Communications Commission (NCC) and the CBN to restructure the loan and new repayment deadline.”

    NAN reports that the company was formerly owned by the are Emirates Telecommunications Group Company with 40 per cent shares, Mubadala Development Company, Abu Dhabi, with 45 per cent shares and EMTS Holding BV has 15 per cent shares in the investment.

    The motion was unanimously adopted by members when it was put to a voice vote by the Deputy Speaker, Mr Yussuff Lasun.

    Read Also: Fidelity Bank takes charge on 9mobile loan

  • Senate to probe Etisalat $1.2bn debt crisis

    Senate to probe Etisalat $1.2bn debt crisis

     The Senate Tuesday resolved to investigate the management and utilization of the $1.2 billion loan facility obtained by Etisalat (Nigeria) from 13 Nigerian banks.

    The upper chamber mandated its Committees on Banking, Communications, Capital Market and National Security and Intelligence to probe the deal.

    It also asked the joint Committee to make recommendations on ways the country’s Financial Governance Structure could be strengthened by legislations to prevent any future similar reoccurrence of such crisis.

    The Senate urged relevant financial intelligence agencies of the Federal Government to investigate the management of Etisalat (Nigeria) and hold the defaulting parties accountable for their actions.

    The resolutions followed the adoption a motion on “the need for Senate’s intervention in the recent ETISALAT (Nigeria) $1.2 billion debt crisis” sponsored by Senator Solomon Adeola (Lagos West)

    Adeola in his lead debate noted that Etisalat Nigeria, a Telecommunication Company operating in Nigeria has in recent times been in the public eye over it’s $1.2bn loan crisis.

    The lawmaker said that he is aware that the syndicated loan was acquired in 2013 as a medium-term, seven-year facility to fund expansion of the network from a consortium of 13 Banks in Nigeria.

    He said that Etisalat ownership comprises of three shareholders, the United Arab Emirates Sovereign Wealth Fund through Mubadala Development Comp Abu Dhabi (45 /u), Emirates Telecommunications Group Company (40%) and Myacinth (15%) through Emerging Markets Telecommunications Services.

    Adeola said that as of 2016, the company had started defaulting on its $1.2 billion loan obligations leading to a few bailouts from its Parent Company in Abu Dhabi.

    He noted that only about 42% of the loan has been repaid, remaining an outstanding debt of $696 million representing 58% of its Capital, which Etisalat has failed to service since 2016.

    He said that “since this year, the Banks have been moving to take over the Telecommunications Company in order to recover their funds.”  

    The Lagos West senator said that the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) have intervened and raised issues of regulatory compliances in trying to prevent a takeover by the banks, but the intervention has failed to produce an agreement on the debt restructuring.

    He observed that all UAE shareholders of Etisalat Nigeria, including state-owned investment fund Mubadala, had exited the company coupled with the resignation of top key management officers of the Company the Chief Executive Officer Mr. Matthew Willsher, Chief Financial Officer Mr. Wole Obasunloye, Director and the 3rd Shareholder/PartnerMr. Hakeem Belo Osagie;

    Adeola regretted that although it should ordinarily not be the duty of the Senate of the Federal Republic of Nigeria to wade into individual debt crisis of private sector businesses; but the Senate is convinced that if this situation is not pr0perly handled, it will have negative implications for the Nigerian Business Environment and on Foreign Investments in Nigeria in general

    He also regretted that a loan of this magnitude has the capacity of setting off another Banking crisis in Nigeria, with Banks looking for bailout funds once again.

    Believes the Nigerian Business Environment must be protected and insulated from all forms of fraudulent dealings in order to advance the Government’s drive towards promotion of genuine investments in Nigeria;

    Regrets that about 4000 jobs are at stake as a result of these suspicious dealings;

    He noted that the decision of the core investors to pull out of Nigeria raises issues of suspicion, on the intent of a Company in obtaining a loan facility, defaulting and then pulling out of the country, hoping that their shares would be used to write off the debts.

    He said that he is aware of allegations that the loans have been diverted to other uses not related to the business for which the huge loan was obtained, as there was no evidence of what the Company did with the loans,

    Senate President, Abubakar Bukola Saraki, said that the Senate must do what it could to protect jobs in the country and work to ensure that the right thing is always done.

  • Intervention to save Etisalat necessary – NCC

    Intervention to save Etisalat necessary – NCC

    The Nigerian Communications Commission (NCC) said on Wednesday it aligned with the Central Bank of Nigeria (CBN) to protect the interest of investors, subscribers and employees of Etisalat (now 9Mobile) in order to ensure amicable resolution of this crisis between the telecommunication firm and a consortium of 13 banks.

    The NCC Executive Vice Chairman, Prof. Umar Garba Danbatta, disclosed this when he received in audience the Chief Executive of 9Mobile, Mr. Boye Olusanya, and Vice-President, Regulatory Affairs at the NCC, Mr. Ibrahim Dikko, in his office in Abuja.

    Danbatta said: “The over $2billion Foreign Direct Investment (FDI), by Mubadala of United Arab Emirates (UAE) was hanging, while 20million subscribers and over 2,000 workers would have been affected if we did not intervene in the matter with a view to finding an amicable resolution.”

    In a statement signed by NCC’s Director of Public Affairs, Tony Ojobo, Prof. Danbatta maintained that “resolving the issue was also partly to forestall any form of disincentive to the FDI.”

    According to him, if the company had gone under, this would have created a social problem especially with the job of over 2,000 Nigerians on the line.

    He added that such situation was capable of creating security challenges for the country.

    Prof. Danbatta said NCC collaborated with CBN to avert a looming economic disaster adding “we want to see a viable and thriving 9Mobile and we want to cooperate with you so that things can move seamlessly and be successful.”

    He assured the 9mobile team of the Commission’s cooperation in the efforts to grow its network.

     

  • Etisalat remains strong – CBN

    Etisalat remains strong – CBN

    The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, said on Tuesday that Etisalat, one of the biggest telecommunication companies in Nigeria, remains strong with a solid revenue base.

    Emefiele stated this while fielding questions from journalists at the end of the Monetary Policy Committee (MPC) meeting of the CBN in Abuja.

    According to him, the Nigeria Communications Commission (NCC), supported by the CBN intervened in the company dispute with some banks because of its huge contribution to the nation’s economy.

    “Etisalat employs more than 4,000 workers, with about 20 million subscribers nationwide,’’ Emefiele said.

    The CBN governor said the apex bank and NCC would not allow the company to go down because of the negative impact on jobs, which was capable of impacting on the economy.

    “The intervention by some potential investors is temporal, it should not last more than 90 to180 days.

    “I am gratified that potential investors are taking part,’’ Emefiele said.

    NAN

     

  • From Etisalat to 9Mobile: loss of brand equity, need for strategy

    Etisalat Nigeria has changed its brand name, after almost a decade of building the brand. While most companies change their names due to rebranding or expansion, Etisalat’s is that of an accidental restructuring: its foreign directors pulled out with their stakes and took their name along. Thus, the telco has adopted 9Mobile as its new brand name. Etisalat Nigeria has been a brand-driven teleco, attempting to build a movement and culture, rather than building only patronage.

    The brand, campaigns and positioning have been revolutionary, innovative and refreshing. The company started business in October 2008, riding on the “0809uchoose” campaign. For the first time, Nigerians were able to choose the phone number with digits of their preference. That was the buzz of the moment, and it drove word-of-mouth marketing for the brand, in addition to high-budget advertising. Almost a decade in the sector, and with a customer data base of 21 million subscribers, the telco has dropped its brand name.

     

    Challenge of selling

    9Mobile?

    By dropping the Etisalat brand, the telco will be losing brand equity – the commercial value of perception built around the brand over the years through advertising and promotions. According to Best Global Brands 2016 Ranking, the brand equity of Apple is $98.3 billion. This  means Apple has the potential to drive $98.3 billion in terms of revenue. Another way to look at brand equity is to look at what the company will be losing in terms of revenue without the brand. According to the same ranking, the brand equity of Coca-Cola is $73.1 billion. This is the value of loss that would be made if the brand signature “Coca-Cola” is taken off the Coke bottles! That is a phenomenal loss and is capable of dragging the company to the brink of bankruptcy. Therefore, the questions to ask are: What would be the loss to Etisalat Nigeria for dropping the Etisalat brand? Will 9Mobile resonate the soul of the Etisalat brand and the identity of 0809ja? Will 9Mobile brand exude the same whimsical brand attitude fitted into customer-centric culture? Will it fly, soar or crash?

    What has happened to Etisalat brand is not rebranding because it is not a result of a dutiful organisational strategy management but management crisis. A rebranding is a strategic process of changing or enhancing the brand of the organisation to gain competitive advantage by changing brand positioning. When it is done properly, it would be preceded by thematic or strategic analysis, and will be hinged on a new business strategy. Then the strategy will be followed up with consistent implementation, which will drive the new brand. In 2007, Apple changed its name from Apple Computer to Apple and announced iPhone1; it led to more smartphones sale. Apple has been working on a new strategy since 2011 when iPod was launched – “Create devices that will form the hub of the digital living room, where audio and visual content will be available on demand and can be networked seamlessly across multiple devices.” That was the awesome strategy that heralded the change of brand name in 2007. In the case of Etisalat Nigeria, the foreign directors who  pulled out of the company, gave three weeks ultimatum for the telco to drop the Etisalat brand name. The result could not be anything near strategy and the outcome is difficult to forecast.

    There is an opinion that Etisalat’s issue is a déjà vu of what has happened to Econet – a telco that has come to be known as Airtel. Airtel was initially known as Econet in 2001, until Econet lost its management contract and Vodacom took over in 2004. After few months, Vodacom pulled out of Nigeria and her partner, V Network took over, changing the brand name to V Mobile. In 2006, Celtel bought over Vmobile and gained 65 per cent control of the telco, changing its name to Celtel. In 2008, the entire African operations of Celtel were taken over by Zain Group and the name of the telco changed to Zain. Bharti Airtel acquired Zain in 2010 to the tune of $10.7 billion and now, the telco’s name is Airtel. This fell short of a proper case study for Etisalat Nigeria’s transformation into 9Mobile. The similarity is that change of brand name for both telcos was accidental. The difference is the nature of transformation they went through.

    For Airtel, change of brand had usually come with change of strategy, in a way that the evolving business gain more brand affinity, and more market share. This was made possible because Airtel has always been a member of a global enterprise and whenever there is a new group, local enterprise keys into the global strategy of the group. The business strategy of Airtel Africa is simply to be a network “designed specifically for smartphones. Be it for faster and clearer videos or for battery that lasts longer” Economic Times  quoted the company’s Consumer Business Director, Srinivasan Gopalan in 2014 to have said.

    This means that Airtel is positioned to provide bandwidth for products; it signaled a shift from the traditional model of selling voice calls only. The data offering and bonus packages are designed to drive the business strategy and thus, the Airtel brand is designed to communicate this promise to customers. For Etisalat Nigeria, the company is not being taken over by an international group; it is being taken over by Nigeria and Nigerians.

    This implies that a lot of work needs to be done to align 9Mobile to some strategic imperatives and take a brand positioning that is superior to that of the Etisalat brand.  Econet-Airtel story cannot therefore be used as a case study; 9Mobile is indigenous in structure and management and will need to build its own brand credibility afresh.  This is the challenge!

  • Over $100m required to rebrand Etisalat – Experts

    Over $100m required to rebrand Etisalat – Experts

    Emerging Markets Telecommunication Services Limited, EMTS previously trading as ‘Etisalat Nigeria’ and now 9mobile requires an estimated $100million to perfect the complete reengineering of its network.

    Although the new management team led by Mr Boye Olusanya was noncommittal at the ceremony to unveil its new logo in Lagos, The Nation reliably gathered that in order to achieve this seamless process of rebranding the cost implication will run into millions of dollars.

    However, speaking in an interview with The Nation, Mr. Olusola Teniola, National President, Association of Telecommunications Companies of Nigeria (ATCON) said, “Full rebranding of Etisalat over the period under new management can be from $100m and above. However, if 9mobile is viewed as a temporary brand name that is in transition awaiting another buyer, then in my estimates, a figure much lower than 100m can be used to rebrand 9mobile over all its customer care centers and kiosks, stationary, bill boards and a very light touch of below the line awareness that doesn’t include SIM card / recharge card rebranding.”

    The ATCON boss was also quick to add that the potential in the industry is enormous and any new investor has the opportunity to define and shape the future of this dynamic industry.

    “A lot of innovative solutions are waiting to be introduced to totally transform the way the existing value chain has been created to address the voice market and needs to be changed to truly address the digital realm.”

    Echoing similar sentiment, the Managing Director/CEO Prima Garnet Africa, Laolu Akinwunmi who acknowledged the fact that the cost of rebranding the network could not be summed up without proper due diligence analysis, said depending on the scope and breadth, a rebranding exercise will not come really cheap.

    Akinwunmi who is also former Chairman Advertising Practitioners Council of Nigeria (APCON) however admitted that the cost of rebranding will be in the region of several millions of dollars.

    It may be recalled that Etisalat Nigeria ran into problems over a seven-year loan facility of $1.2billion from 13 local banks and their foreign counterparts to refinance a $650 million loan as well as the expansion of its network which it could not redeem due to a dollar shortfall in Nigeria’s financial system.

    The 13 local banks involved in the loan deal include: Zenith Bank, GT Bank, First Bank, UBA, Fidelity Bank, Access Bank, Ecobank, FCMB, Stanbic IBTC Bank, Union Bank.

    However, the Central Bank of Nigeria had to wade in following the exit of Etisalat lenders and Abu Dhabi state investment fund Mubadala, the second-largest shareholder in the business, which pulled its investment of the company.