The umbrella body of telecommunications companies in Nigeria, the Association of Licenced Telecommunications Operators of Nigeria (ALTON) has criticised the proposed bill by the House of Representatives to mandate shareholding in telecommunications companies.
According to the body, the bill, if passed, will hinder Foreign Direct Investments (FDI) in the country. ALTON stance is that the decision to sell telecom shares to Nigerians should not be subjected to a legislative enforcement but should be the commercial decision of the Telcos concerned to get listed in the nation’s bourse or remain as a limited liability company.
This is coming on the heels of the House of Representatives Committee on Capital Market’s position that the Global System for Mobile communications (GSM) operators-MTN, Globacom, Airtel and Etisalat-and the oil companies should be made to sell shares to Nigerians on the floor of the nation’s stock exchange.
Speaking with The Nation on the issue, ALTON’s president, Gbenga Adebayo said there was no ground for compelling telecom operators to sell shares to Nigerians.
Adebayo, an engineer, stressed that Nigeria has a long way to go in boosting foreign direct investment into the nation’s telecom sector. He said making such bill a law could hinder investments into the sector.
According to him, the decision to be listed on the nation’s stock exchange is purely a commercial decision of the telecom companies and does not require subjection to any legislative debate. He said: “There is no ground to compel operators to list their shares on the NSE. It is unheard of. The world over, such a decision is purely commercial and I don’t think it should be subjected to legislative debate in order not to discourage foreign direct investment into the country. We have never heard that any Telco has been compelled to sell shares in their countries of operations.
“We don’t believe that because of the perception that operators are making huge profits, they should be mandated to be listed on the stock exchange, without taking into cognisance the fact that they also spend a large chunk of their profit in network expansion and infrastructure roll out, with attendant challenges in an economy such as Nigeria.
“ALTON strongly stood against the House of Representatives Bill on Telecommunications (Equity) (HB173) in 2009. This bill set to mandate shareholding in telecommunications companies. Our position was submitted to the Nigerian Investment Promotion Commission (NIPC) in May 2009.”
He said ALTON’s position was that if the bill is passed as drafted, it will fundamentally alter the Federal Government’s Foreign Direct Investment policy and negate the role of NIPC; as well as amount to re-enacting of the Indigenisation Act of 1972.
Adebayo stressed that the position of the operators remains the same: We don’t need any law to compel us to sell shares on the NSE.