FG Hands over NITEL/ MTEL to New Owners

The liquidated assets of Nigerian Telecommunications Plc (NITEL) and Nigerian Mobile Telecommunications Limited (MTEL) have been formally handed over to new private sector owners in Abuja Tuesday. Vice President Sambo stated during the formal handover ceremony that Nigeria would not attain the desired economic growth without adequate reforms and liberalisation of the telecommunications sector.
He said that the new legal framework provided the basis upon which the process of privatising NITEL commenced in 2001, since then, there have been four different unsuccessful attempts to privatise NITEL to private operators and one failed management contract all aimed at re-positioning the company, to play a significant role in the Nigeria economy. In this regard, he stated that privatisation must be seen as a necessary tool for the deregulation and opening up of hitherto government dominated sectors of the economy to the private sector as well as divestiture of government’s interest in such sectors. Sambo noted that the formal handover of NITEL and MTEL assets to NATCOM Consortium was a clear indication of what can be achieved where there was focus and determination adding that “this is a ceremony that would not have been possible without the leadership, unparalleled support and commitment of President Goodluck Jonathan, to the roadmap for the provision of robust telecommunications services to drive the economic transformation of Nigeria.”
This handover ceremony, the VP noted, is a culmination of years of painstaking efforts by the National Council on Privatisation (NCP) and its Secretariat, the Bureau of Public Enterprises (BPE), the Liquidator, the Federal Ministry of Communications Technology and other key stakeholders to increase competition in Nigeria’s Telecommunications Industry. “It was the realisation that Nigeria will not attain the desired economic growth without adequate reforms and liberalisation of the telecommunications sector that informed commencement of the telecoms sector reform in 2001.” “These led to the attempted privatisation of NITEL and MTEL through Strategic/Core Investor sale to Investors International London Limited.”
“Unfortunately, that flagship transaction failed as the preferred bidder could not meet deadline for the payment of the purchase consideration.” Giving a breakdown of history that led to the privatisation Sambo observed that Failure of the first Strategic Investors 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 MTEL and was terminated.
Orascom Telecoms emerged the highest bidder with a bid of $256million during the second privatisation attempt. Its bid was however rejected by the Federal Government as it was below the reserved price.
The National Council on Privatisation in 2006 adopted the willing Buyer-Willing Seller or Negotiated Sale Strategy. This strategy was adopted to shorten the transaction period since the financial position of NITEL and MTEL was deteriorating, Trans-National Corporation of Nigeria Plc (TRASNCORP), the selected bidder at the time however failed to turn around the fortunes of the enterprises after two years of taking over.
After evaluation, only NATCOM Consortium met the technical requirement and its financial proposal was publicly opened on Octoober 24, 2014.
He disclosed that the first bid was USD221 million which was below the reserved price, but after a second round of bidding, the revised bid of USD252, 221,000 was above the reserved price and NATCOM was therefore, declared the preferred bidder.
“The reform and privatisation program are rightly focused on the big picture, that is, the impact on the economy as a whole and ultimately the greatest good for the number of Nigerians.”
“I would like to gratefully acknowledge the leadership of Mr President and the commendable roles of the NCP Chairman, NCP/BPE, the Liquidator and Ministry of Communications Technology in the actualization of this dream,” the VP noted.
He congratulated NATCOM Consortium for their patience through a very rigorous and transparent transaction process, saying that the process you have gone through has matched international best practice.
“We appreciate your faith in the process and your faith in the Nigerian government and economy. We look forward to your resuscitating the company and improving service delivery to the Nigerian consumers.
“Today’s handover of assets of NITEL and MTEL to NATCOM Consortium is a clear confirmation of the words of the late Nelson Mandela that says ‘Things always seem impossible until they are done”
Delivering his welcome address, the Director General of BPE, Benjamin Ezra said that “Today we begin to reap the efforts of over a decade of reform and privatisation of Nigerian Telecoms sector. A lot has been happening and a lot has been achieved and a lot more are in the works and the end result will significantly improve the lives of Nigerians.”
“We faced numerous challenges including outstanding unpaid terminal benefits of ex-staff of NITEL and MTEL, arrears of salaries of the retained staff and outstanding security and huge accumulated unpaid license and other fees due to NCC that would have killed the transaction.