Business
NATCOM faces herculean challenges to revive Nitel
The recent 70 percent balance payment for the purchase of Nigerian Telecommunication Limited (NITEL) and its subsidiary M-TEL by NATCOM Consortium has set the successful bidder on the path to revive the moribund company.
With the level of years of inactive operations of Nitel, there is palpable fear that the new investor would have more challenges to tackle before the company can start offering services.
Nitel was recently handed over to NATCOM Consortium, the top bidder for the (NITEL) after the balance of $252.25 million.
NATCOM Consortium has paid $75.7million – 30% – of the $252.5 million asking price approved in December by the National Council on Privatisation (NCP).
Reacting to the successful payment for NITEL, ALTON President, Gbenga Adebayo, expressed satisfaction for the eventual takeover. “It is too early to establish the success trend of the company. Its relevance will largely on the type of service it will be offering Nigerians,” Adebayo said.
Some analysts posit that a mix of Nigerian and foreign investors led by Tunde Ayeni, the Chairman of Skye Bank, there hope for Nitel revival. Their optimism is hinged on the belief that finance would not be a challenge to NATCOM to turn around Nitel.
They also however expressed concerns over the deplorable and obsolete state of Nitel infrastructure.
Speaking with Hallmark, Stephen Bello, a former Commissioner with Nigerian Communications Commission (NCC), said NATCOM has a long way to go before it can have relevance in the telecom industry market.
“I don’t see NATCOM making any impact between now and three years.
That is if they can start operation now. There are many hurdles before the new company because of the nature and state of the acquired beleaguered Nitel.
There is nothing much the new company can ride on. Almost all the infrastructure of Nitel is obsolete. So, for NATCOM to have a fair share in the market, it would take years,” Bello said.
In the same vein, industry observers are of the view that the stiff competition that has pervaded the telecom industry would be a major challenge for the new company to carve a market niche.
Already, voice service which used to be the premier service of Nitel and M-tel is fast becoming unprofitable to telecom operators.
On his part, Nigeria Internet Group (NIG) President, Bayo Banjo said the data service that NATCOM would have been an edge to the new investor is also facing competitive threat of other telecom operators.
According to him, “The Sat-3 undersea cable that NATCOM can use as a unique selling point (USP) is having competitors like Glo-1, WACS and MainOne. This development will definitely impede the successful operations of NATCOM in the coming years, if at all it would begin operations as mandated by the Bureau of Public Enterprise (BPE).”
NATCOM is required to roll out telecoms services in Nigeria within the next three years.
Industry observers posit that the myriad of challenges which has enmeshed Nitel leaves little hope for NATCOM for successful deployment of telecom services in the country within three years and even beyond.
The degenerated state of Nitel is believed to have established shortly after the commencement of GSM operations in 2001.
