NITEL: BPE May Disqualify Globacom, Investcom

Proshare

June 19, 2006

 

 

 

<p style="text-align: justify;"><span style="color: rgb(153, 153, 153);"><span style="font-size: x-small;"><span style="font-family: Verdana;"><em>June 19, 2006/independent</em></span></span></span></p>
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<p style="text-align: justify;"><span style="font-size: small;"><span style="font-family: Verdana;">Globacom and Investcom may be disqualified from the sale of Nigerian Telecommunications Limited (NITEL).<br />
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Each seeks the 51 per cent shares on offer, but both are likely to be ruled of by the Bureau of Public Enterprises (BPE), based on the protest by the Nigerian Communications Commission (NCC). <br />
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Sources at the BPE and the NCC confirmed at the weekend that the agencies are exchanging correspondence on the interest shown by some bidders. <br />
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MTN is not directly bidding for NITEL. However, Investcom, which it bought recently at $5.5 billion, is keen on it.<br />
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The NCC, according to one of its own officials, has written to the BPE for confirmation of the reported interest shown in NITEL by some companies operating in the country. <br />
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<p style="text-align: justify;"><span style="font-size: small;"><span style="font-family: Verdana;">\&quot;We do not want to rely on newspaper reports that these companies have shown interest in NITEL so we had to write them to confirm the reports\&quot;, he explained.<br />
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<p style="text-align: justify;"><span style="font-size: small;"><span style="font-family: Verdana;">BPE Spokesman, Joe Anichebe, added that the bureau would write some regulatory agencies to seek clarification on the status and eligibility of some of the bidders. <br />
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<p style="text-align: justify;"><span style="font-size: small;"><span style="font-family: Verdana;">He did not mention the names of the companies, neither did he confirm if the BPE has written to the agencies.<br />
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<p style="text-align: justify;"><span style="font-size: small;"><span style="font-family: Verdana;">Based on its stand in 2005, the NCC may protest the bids by Globacom and Investcom (owned by MTN) on the ground that their interest violates the spirit of fair play and competition. <br />
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<p style="text-align: justify;"><span style="font-size: small;"><span style="font-family: Verdana;">The telecom policy provides for two national carriers and four GSM companies, seeks to encourage multiple players and discourage market dominance. <br />
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<p style="text-align: justify;"><span style="font-size: small;"><span style="font-family: Verdana;">If Globacom, the Second National Operator (SNO), buys NITEL the number of players will be reduced to one and it will become the dominant operator.<br />
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<p style="text-align: justify;"><span style="font-size: small;"><span style="font-family: Verdana;">Globacom has always eyed SAT-3, one of the key infrastructure of NITEL, which it has unsuccessfully tried several times to have a stake in.<br />
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<p style="text-align: justify;"><span style="font-size: small;"><span style="font-family: Verdana;">John St.Claret Eziani, a telecom lawyer, insisted that Globacom\'s bid violates the telecom policy because an SNO cannot buy the First National Operator (FNO). <br />
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<p style="text-align: justify;"><span style="font-size: small;"><span style="font-family: Verdana;">He said he would go to court to challenge the sale if it happens.<br />
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<p style="text-align: justify;"><span style="font-size: small;"><span style="font-family: Verdana;">NITEL is due for privatisation at the end of this month, according to the schedule of the BPE. <br />
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<p style="text-align: justify;"><span style="font-size: small;"><span style="font-family: Verdana;">Apart from releasing the list of companies that have shown interest, the BPE has not indicated a discernible programme for the sale. <br />
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<p style="text-align: justify;"><span style="font-size: small;"><span style="font-family: Verdana;">It said, however, that it would not follow the usual process of privatisation as time is no longer on its side while NITEL continues to lose value.<br />
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<p style="text-align: justify;"><span style="font-size: small;"><span style="font-family: Verdana;">Others interested are Telekom, Afro Telecommunication/Korean Telecom and Etisalat. Celtel pulled out after its purchase of Vmobile.</span></span></p>

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