By Ugwoke Peace Udoka
Who would believe that neither the Nigerian Communications Commission (CBN) nor the Central Bank of Nigeria (CBN) has full grasp of what is happening, currently, with regards the proposed sale of 9Mobile.
Intrigues surrounding the transaction, most times false speculations are not doing the brand any good. In fact, if it were the interim Board’s plot to lure potential buyers to dole out more money, then, they there is need to adopt another strategy.
For transactions like this, obviously, there is unusual power play. Be that as it may, common sense should prevail. The creditors deserve their funds, the customer looks forward to a better service, the regulator expects a healthy industry and the economy yawns for better performing companies.
Though, the then Etisalat was already shedding weight in terms of subscriber base, but after the rebranding to 9Mobile, and the recent news surrounding the sale, the situation has worsen. It appears some subscribers are jittery.
For instance, the Nigerian Communications Commission’s statistics show the operator, as the fourth largest telecommunications network operator with over 21 million users, it controls about 12.9% of Nigeria’s telecommunications market share.
However, this number decreased from 20,521,952 as at January 2017 to 17,075,813 as November 2017. By the time December 2017 and January 2018 reports are released by NCC, probably the number would have gone down further; it is never a wish, but the reality on ground. This is not good for such a promising brand that understands the needs and language of the customers, mostly youths. Till date, there are still debate about 9Mobile having the best quality of service in terms of data.
What are the issues?
In 2013, Etsialat (now 9Mobile) delved into obtaining loans summed up to $1.2 billion from thirteen Nigerian banks.
The banks worth the most exposures include Zenith Bank, Guaranty Trust Bank and Access Bank with the total loan – N80 billion, N42 billion and N40 billion respectively. In this regards, they can’t easily balance their accounts; hence their operating licences are at stake too. So, when the CBN pushes then hard, they flash the Etialat loan as the reason accounts aren’t balancing.
In 2016, the company failed to meet its debt servicing obligations, which was according to them as a result of the economic downturn and its effect on the naira. The banks reported to telecommunications sector regulator- NCC, and financial sector regulator- CBN, demanding to recover the loan or take-over the company.
On March 10, 2017, the intervention of the NCC and CBN succeeded in persuading the banks to suspend their threat to take-over Etisalat, after all parties agreed to restructure the loan, with May 31, 2017 as the new repayment deadline. Again, Etisalat failed to meet the deadline. Further negotiations later collapsed, resulting in the banks issuing a final defaulting note and enforcement notice on June 9, 2017 to Etisalat, to commence the process to take-over Etisalat after it reneged on the agreed repayment deadline, effective June 15, 2017.
Fortunately, CBN and the NCC came to the rescue of this company because they didn’t want the ‘dismemberment’ of the company which would throw workers into disarray. This singular act led to a change in the management and board of the company, as well as the transition of its name from Etisalat to 9mobile.
Subsequently, 9mobile was handed over to Barclays to conduct an acquisition, after previous engagements with Standard bank and Citigroup has been dropped. Over ten companies – including Globacom, Airtel, Smile Communications, Helios, and Teleology Holdings Limited – have submitted their Expression of Interest (EoI) forms to Barclays. Speculations have it that the process might have been opaque. While a large chunk of the population are of the view that the company has been sold to Globacom, others state otherwise.
At a point, Teleology was mostly publicised as has emerged the preferred bidder. Later, it was confirmed that the bidding process is still ongoing.
The confusion is so much that Airtel and Helios were said to have petitioned the presidency over the bidding process. Nobody has concretely told the market true position of things. In all this, 9Mobile brand name is at stake.
With all this going on, the 9mobile brand keeps being demarketed. This means that customers are retracting from the brand and customers brand switching behaviours are being displayed. This invariably results in decrease in revenue, goodwill and value of the 9mobile brand.
Even the NCC has denied having full knowledge about the transactions processes. Truly, it falls on the purview of the interim Board of 9Mobile to take decision on who to sale the operator to. Any document submitted to NCC and CBN then becomes an epistle that can’t be changed.
The regulator explains
For this reason, NCC has even warned of dangers of false speculations which isn’t to the favour of the Company.
The Executive Commissioner, Stakeholders Management at NCC, Mr Sunday Dare disclosed, during an interview with newsmen in Lagos, that contrary to reports that Teleology had emerged the preferred bidder for the company, the Commission has not been informed of any new owner of 9Mobile. So, who is flying the kit and for what reason?
It implies that the interim board of 9Mobile was yet to communicate to NCC who the winner was which shows the process was still inconclusive.
Hear Mr. Dare: There are two regulators involved in the issue, the financial and telecommunications regulators.
“Unless the financial process is complete, the licensing process does not really kick in.
“Until then and until we have evidence of the final report, these speculations will not do the brand any good, it will not do the subscribers any good. And because of all the unconfirmed reports, subscriber base of 9Mobile dropped from 21 million to 17 million. We just need to wait for another 30 to 40 days to have a clarity on true situation,” he said.
Therefore, the CBN and NCC were carrying out their oversight duties in order to make sure that 9Mobile does not sink, which is quite commendable.
“In that process which began several months back, we have saved 4,000 jobs and saved 9mobile from crashing and we kept up other creditors that have been working with them.
“Now we have come thus far, and there are several litigations going and we have to be careful,” he said.
Dare said that Capital Trustees and 9Mobile interim board had the powers to guard the sale processes to a logical conclusion.
Looking at the situation, the regulators may need to intervene again to see that the process goes through; if not, 9Mobile may remain unsold by second quarter of this year which will further affect its growth. All stakeholders ought to come to a table now for clarity of purpose on how best to save 9Mobile.
Ugwoke Peace Udoka, ACA, MNIMN, BSc (Marketing) University of Nigeria, Enugu Campus, 2016. She can be reached via: [email protected]