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Published On: Mon, Jul 17th, 2017

Etisalat: 9Mobile’s tough call


The new management of ailing mobile telecommunications giant, 9Mobile (formerly Etisalat Nigeria), has devised strategies aimed at turning the company around amid continuing financial and ownership crisis.
Last week, the management of the firm decided to adopt 9Mobile as its new brand name after a meeting in Lagos. According to a source privy to discussions at the meeting, board members voted for the adoption of 0809 number plan, which the network had debuted with in 2008.
He said, “As you know, the network started operations in 2008 with the 090naija4life slogan. This informed the use of the figure 9 in rebranding the network.
“It was also resolved that 9Mobile should drop the domain name, www. etisalat. com.ng after it was unable to reach an agreement with Etisalat International of the United Arab Emirates and its Nigerian partner, Emerging Markets Telecommunications Services Ltd, in the wake of a crisis over a $1.2 billion loan package, which defied solutions”.
BusinessHallmark reliably gathered that all efforts to get the approval of Etisalat International for the continued use of its Etisalat franchise and provision of technical support failed, leaving the new management of the network giant with no other choice than to severe all links and partnership.
It would be recalled that the CEO of Etisalat International, Hatem Dowidar, had recently said that “All UAE shareholders of Etisalat Nigeria, including United Arab Emirates-owned investment fund, Mubadala, have exited the company and have left the board and management. I don’t think we want to come back to Nigeria or have any dealing with the firm as it is. The train has left the station on that one”.
Findings revealed that the 13 consortium banks, namely Guaranty Trust Bank, Access Bank, Zenith Bank, UBA, Fidelity Bank and First Bank, among others are now the owners of the network in a new share-restructuring arrangement.
Before the takeover, UAE’s Etisalat Group had 45 percent stake in Etisalat Nigeria, followed by Abu Dhabi’s Mubadala, with 40 percent stake and the Hakeem Bello-Osagie-led Emerging Markets Telecommunications Services (EMTS) with 15 percent stake. All their shares (100 percent) have been ceded to the banks, it was learnt.
Efforts by our correspondent to know the plans of the network’s management failed as calls to its Vice President, Regulatory and Corporate Affairs, Ibrahim Dikko, were not picked while a text message to his mobile number failed to elicit any response.
However, a telecoms expert, Dr. Olawale Durotimi, who bared his mind on what the network should do to revamp its fortune, said some of the options available for 9Mobile are consolidation, merger or finding new investors.
“Since the banks can’t run the network, I think they will try to stabilise it first and then sell it to prospective buyers. The banks have the option of restructuring the debt after transferring it to its new owners. Another option is to merge with the existing three networks, namely MTN, Glo and Aritel,” Durotimi said.
In a move aimed at resolving its debt crisis and attracting new investors, the network recently announced the reconstitution of an interim board and executive management, naming Mr. Boye Olusanya as its new Managing Director/CEO.
Olusanya was the former Deputy Managing Director of Celtel, which now operates as Airtel Nigeria, after its acquisition by India’s Bharti Airtel.
The network also named Dr. Joseph Nnanna, an economist and Deputy Governor of the Central Bank of Nigeria (CBN), as the new chairman of its board.
Other members of the new board include former National Senior Partner, KPMG Professional Services, Mr. Oluseyi Bickersteth; former Managing Partner, PricewaterhouseCoopers (PwC), Mr. Ken Igbokwe; and Mrs. Funke Ighodalo, who has been appointed the new CFO of 9Mobile.
According to insider information, the five-man board was carefully appointed by all parties – CBN, the banks and shareholders – involved in the restructuring of the telco.
On the five-man board, CBN was given the chairmanship slot, the shareholders were given one slot for an NED, while the banks got three slots (CEO, CFO and an additional NED).
Meanwhile, the Asset Management Corporation of Nigeria (AMCON) has said that it is not involved in the current effort to save the troubled network giant.
Its Head, Corporate Communications, Mr. Jude Nwauzor, told BH that the network is not in the corporation’s portfolio of manage companies. “We are not currently involved. We are leaving the banks to sort out the problem. It is only when they can’t do that that we can come in to recover the debts. But it hasn’t come to that point. We should just allow the banks to do their job”, he said.
Trouble started for Etisalat Nigeria in 2016, following its failure to meet its obligation in respect of a $1.72 billion (about N541.8 billion) loan facility it obtained from a consortium of banks in 2015.
The loan, which involved a foreign-backed guaranty bond, was for the mobile telephone operator to finance a major network rehabilitation and expansion of its operational base in Nigeria.
Failure to meet the debt servicing obligations agreed to since 2016 result in the consortium of banks, prodded by their foreign partners, issuing a threat to take over the company and its assets across Nigeria.
The intervention of the NCC merely helped in postponing the evil day. The invitation of the CBN to be involved in the negotiations succeeded in persuading the banks to give Etisalat a chance to renegotiate the loan’s repayment schedule.
However, Etisalat Nigeria also faltered on the May 31 repayment deadline it gave the banks, resulting in a final defaulting note and enforcement notice issued on June 9, 2017 empowering the banks to swoop on the company and takeover.
The inability of the management of Etisalat Nigeria to make any meaningful progress in its negotiations angered Mubadala, providing it with the reason to make up its mind to walk away from the business.
Experts have expressed fear that the telco company could be facing serious challenges ranging from rebranding, retaining their customers who are unfortunately already migrating to more stable networks among other hiccups that may be telecoms based.
Others commentators have also said that with the economy in a recession, there is discomfort a company in crisis may find it difficult to survive in a weak economy. In fact, the issue of forex volatility is still seriously ravaging companies who have either borrowed money in foreign currency or have other forex related dealings are in bigger trouble than envisaged.

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