As a keen observer of Nigeria’s technology and digital economy sector, I’ve been impressed by your low-key yet effective approach to driving progress.

Despite the ministry’s robust activities, your behind-the-scenes style suggests a commitment to substance over showmanship.

Given your tenure as Chief Technology Officer at Interswitch and your entrepreneurial endeavours at Ceviant, your expertise in the digital space is undeniable. This positions you uniquely to offer strategic advice to the government.

I’m compelled to bring to your attention the precarious state of the telecom sub-sector. Nigeria’s digital economy has tremendous potential, but regulatory challenges, infrastructure deficits, and market pressures threaten the very survival of telecom operators.

The sector’s growth is hindered by issues such as multiple taxation, issues over right of way, infrastructure damage and the unsustainable pricing framework amongst others.

I think I hit the point too early. Let me provide some context; a historical perspective on the sector’s development is essential to grasp the current challenges.

When the Global Systems for Mobile Communications (GSM) was first introduced into the Nigerian market in 2001, the acquisition of a cellular device swiftly became a badge of distinction, signifying one’s immersion in the technological revolution of the 21st century.

The devices became the exclusive purview and financial burden of the elite, relegating many middle-class households to sharing a solitary device among its members. It was expected.

The cost of procuring a Subscriber Identity Module (SIM) hovered between N40,000 to N50,000 (about $384 to $480 at the time), while iconic models such as the NOKIA 3310 and Samsung series commanded prices exceeding N80,000 (about $769) to over N100,000 (about $961).

At inception, networks operated within the 900 and 1800 MHz spectrum with a billing structure set at about N50 per minute, until the introduction of the per-second billing system which revolutionised the industry. As such, barely 10% of the country’s 125-million population could afford to own a device with regular credit recharge.

Mr. Special Adviser, you’re aware that before the arrival of such devices with an unattainable luxury status for the economically disadvantaged, Nigerians had long grappled with problematic services from the oft-maligned Nigerian Telecommunications Limited (NITEL).

Until 2001, NITEL’s 16-year operation was plagued with citizen discontent over poor management as it maintained monopoly over Nigeria’s telecommunications and data services.

The arrival of GSM — spearheaded by MTN, Econet (now Airtel) and MTEL months apart in 2001, and Globacom two years later in 2003 — to relieve the troubled service provider, therefore, changed everything.

In mobile phone accessibility and internet service affordability progress since that time, the numbers have been staggering.

By 2022, two decades after GSM introduction, more than 222 million mobile phone subscribers existed in Nigeria according to the Nigerian Bureau of Statistics and the Nigerian Communications Commission (NCC), out of which over 215 million were active.

The projections for the future are just as phenomenal. A steady surge in smartphone adoption is expected across the country from 2024 to 2029, with the user base estimated to reach a new peak in the next five years.

Network subscriptions costs are also among the lowest in the continent. Mobile data subscriptions in Nigeria, today, are available for as low as N25 while call rates go as low as 9 kobo per second.

However, considering Nigeria’s business climate in recent years, providing affordable services to citizens while maintaining high-standard infrastructure presents the greatest challenge for the telecommunications industry and operators in the country.

Experts within the sector and the economy like Karl Toriola, CEO of MTN Nigeria, and Bismarck Rewane, CEO of Financial Derivatives, have postulated that the sector is at the verge of collapse, one which portends consequential risk to other sectors which rely on the critical services the Telcos provide.

Nigeria’s economy has experienced two major recessions over the last 10 years and currently faces one of its most difficult periods of uncertainty.

Recent market conditions and currency devaluation have plunged the value of Naira in the foreign exchange market, resulting in skyrocketed prices of commodities.

Unfortunately, the telecommunications sector, which contributes approximately 16% to Nigeria’s GDP, is, like other sectors, not immune to the profound repercussions of the prevailing economic upheavals.

The telecoms industry, like many others in the country, is heavily reliant on foreign exchange (FX) for the procurement of essential equipment, infrastructure, and technology.

With a significant portion of telecom equipment and services being imported from foreign markets, fluctuations in currency exchange rates directly impact the cost of operations for industry players.

As the value of the Naira fluctuates against major currencies such as the US Dollar and Euro, the cost of procuring equipment and services denominated in foreign currencies escalates, placing immense strain on the financial resources of telecom companies.

MTN Nigeria and Airtel were among 11 listed companies, including Nestle and Dangote Cement Plc, which recorded 2.02 trillion naira FX losses in H1 of 2024.

Mobile network operators in the telecommunications sector, whose tariffs are rigorously regulated by the NCC, therefore, face a dilemma in balancing investments towards sustaining quality and affordable services for their vast subscriber base with their goal of achieving profitability.

For a sector battling various environmental and infrastructural impediments including frequent fibre cuts due to road construction and vandalism, right-of-way challenges, and exploitative rent-seeking practices, maintaining operational efficiency amidst prevalent economic adversities become increasingly daunting.

None of these existing challenges are alien to industry regulators and stakeholders. Operators’ advocacy for critical infrastructure protection in the ICT/telecommunications sector in recent years has especially served as a striking illustration of a cry for proactive actions to curtail the profound financial impact of such obstacles on its operations.

Yet, while these challenges persist, mobile network operators have remained unflinching in their commitments to ensuring seamless connectivity, service reliability, and pricing affordability for their subscribers.

Despite Nigeria’s headline inflation rate surging to a 27-year peak of 29.9% in December 2023 and reaching 31.7% in March 2024, the telecoms industry, compared to other sectors adeptly adapting to Nigeria’s changing market conditions, continues to find itself traversing the intricate terrain of regulatory compliance and financial viability.

In the mobile market which maintains a strong connection to the telecoms sector, for instance, prices of mobile phones, today, have nearly doubled to reflect the rising cost of production and import, while call and data tariffs largely remain the same they have been for over a decade.

A similar rise in cost has been evident in food prices which increased to over 30% in February, impacting the fast-moving consumer goods (FMCG) sector.

The sector has since adjusted, with FMCG corporations including brewing companies increasing product prices in tandem with the high cost of raw materials and production.

Companies in other sectors providing domestic consumer needs, such as Pay TV companies and Discos, have also duly followed suit by conducting price reviews in recent times.

It should also be noted that energy costs have been a significant factor in the general upward pressure on costs across the economy, particularly affecting telecom companies, for whom diesel accounts for approximately 35% of their operational expenses.

While these price adjustments may be inconvenient for consumers due to limited purchasing power, they are more than necessary for businesses to continue to meet demands, deliver value to shareholders, and contribute significantly to the Nigerian economy.

It is especially pivotal to recognise the broader socio-economic implications for Nigeria if the telecoms sector sticks with its pricing plans as other sectors adapt.

The industry is reputable for its crucial role in driving economic growth, creating employment opportunities, and improving digital inclusion efforts across the country.

Notably, over 15,000 have been directly employed by licensees in Nigeria’s $75.6 billion telecoms sector, according to a December 2022 report by the NCC.

Also, as of second quarter 2023, the Information and Telecommunications industry ranked highly among activity sectors contributing the most to the country’s GDP.

Not least of mobile service providers’ critical contributions to socio-economic issues is their position at the forefront of Nigeria’s digital inclusion ambitions, which sees them providing more than 83 million citizens with the opportunity to benefit from prompt information access and exchange necessary for increased social and business productivity.

A lack of adjustments within the sector amidst FX-dependent pressures and rising inflation will indubitably pose a threat to these transformative indicators in the next few years.

When telecom companies struggle to maintain and expand their infrastructure, there are higher chances of network congestion, dropped calls, and slow internet speeds that can undermine productivity, hinder business operations, and diminish the overall quality of communication services.

Operators’ ability to invest in infrastructure upgrades, network expansion, and technological advancements could be significantly hampered, significantly impacting coverage and service quality.

They can’t afford to test consumers’ patience in this regard.

Quality of Service (QoS) in the sector is, indeed, deemed non-negotiable among consumers. Regardless of any situation within or beyond their control, operators are expected to uphold high standards of service delivery to remain competitive and retain customer loyalty, and any compromise can have far-reaching consequences.

But maintaining and improving on progress made thus far in the sector would be impossible without access to adequate financial resources for further investments.

It is, as such, a critical time to employ new adaptive strategies for the sector to achieve profitability and survive in an increasingly competitive landscape.

Operators such as MTN Nigeria, Airtel, Globacom, and 9Mobile have, commendably, demonstrated an understanding of the grim economic situation impact on citizens’ spending power by adhering to regulators’ rules and showing restraints in pushing for higher charges.

Their show of empathy, however, could be their Archille’s nemesis in a brutal business and economic climate. Hence, the review of tariffs to reflect new economic realities, despite regulators’ reluctance, may be overdue.

At this crucial moment, the onus falls on regulators to ensure consumers are adequately enlightened on how an upward revision of tariffs is imperative for the industry’s viability, as it would provide crucial funding for network infrastructure upgrades necessary for the continued delivery of world class services.

A measured review of current tariffs, with pricing plans that are adaptive and responsive to the changing business and economic climate, would ensure the industry mitigates potential socio-economic and business risks.

Although there would be a need for regulators to strike a delicate balance between consumer protection and the sustainability of the telecom industry.

Nigeria’s leading telecoms companies, including MTN, Glo, Airtel & 9mobile, have expressed their readiness to collaborate with regulators on reasonable adjustments in call and data tariffs to mitigate the cost of running their networks.

“For a fully liberalised and deregulated sector, the current price control mechanism, which is not aligned with economic realities, threatens the industry’s sustainability and can erode investors’ confidence,” the telcos, speaking as a unit under the aegis of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), explained in a recent statement.

As the economic pressures on the sector intensify, consumers would hope that the operators’ concerns are understood, and urgent actions are taken to ensure their continued access to improved quality services, before the inevitable damaging impact of a lack of it becomes more pronounced than imagined.

As I conclude, I must emphasise that your understanding of the sector is evident from your track record. Your article published on TechCabal on August 21, 2024, compellingly argued the significance of the NIMC for Nigeria’s digital future.

Building on this, the NIMC and Nigeria’s digitalization efforts rely heavily on telecom sustainability and development.

Consequently, Nigeria’s digital transformation and leveraging technology for national economic growth hinge on telecom efficiency, underscoring the imperative to address the sector’s concerns.

I acknowledge that you are neither the supervising minister for the industry nor the regulator. Incidentally, the current individuals holding these positions are doing an exemplary job, given the circumstances.

Nevertheless, your in-depth knowledge of the industry and the trust you’ve earned from the president and minister position you uniquely to intervene effectively.

You now have a critical opportunity to bring to the president’s attention the plight of this vital sector, often described as the ‘golden goose’ of Nigeria’s economy.

By advocating for strategic policy decisions, such as cost-reflective tariffs, tax harmonization, intervening in right of way issues amongst others, you can help restore investor confidence, drive infrastructure development, refocus on key objectives, and enhance network optimization for both private and public entities.

*Edidiong Samuel Akpabio is a Nigerian public commentator, researcher and academic. He can be reached via: esakpabio@yahoo.co.uk

Nigeria being the largest economy and population on the continent has historically appeared a favoured destination for businesses.

Many of these economic power houses provided economic advancement and some have dominated their industries with positive experiences.

There are, however, also negatives that sometimes outweigh the positives.  Due to their sizes, some of them have come to dominate the markets they operate in.

The issue of dominance becomes more pertinent during economic downturns especially as Nigerians get poorer by the day.

Nigeria’s GDP per capita for 2022 stands at $2,184, materially down from around $3,200 in 2014 and almost the same as it was in 2008.

South Africa’s GDP per capita is $6,770 in 2022, three times that of ordinary Nigerians by contrast albeit it is also struggling with its own issues.

Multichoice, SAB Miller, Stanbic are some of the large beneficiaries of the Nigerian open approach to market. But no company on the continent gets to benefit from Nigeria’s size and openness to foreign companies more than MTN as it has dominated the telecom sector for the past decade and keeps expanding its dominance.

Dominant companies are generally considered to be bad for consumers and the economy.

When markets are dominated by one or few players, there’s a danger that these players can abuse their power to eventually increase prices to customers or reduce quality to increase profits.

This kind of excessive market power can also lead to less innovation, losses in quality, stifling local entrepreneurship and higher inflation.

Dominant companies can also influence the direction of the market to favor their own profits above all.

For instance, a firm with deep pockets can set prices below costs and absorb losses until competitors can no longer survive. Then, once the competition is eliminated, the surviving firm can raise prices high enough to more than cover the losses it took while establishing its now-dominant market position.

The problems with dominant companies also go beyond the economic effects. Many large, economically powerful companies also have considerable political influence and the ability to “capture” the political and regulatory process.

This allows a powerful firm to tilt the legal and regulatory processes against any potential threat to its market power, and to bring about changes that further enhance the profits it earns.

MTN was founded in 1994 in South Africa as M-Cell. In 2001, MTN started operations in Nigeria as the country decided to privatize the telecom industry and issued four GSM licenses then. In 2001 when MTN entered Nigeria its total revenue was around Zar 8 billion.

By 2015, only Nigeria was contributing more than Zar 50 billion of MTN’s total revenue. This was the extent that the size and impact Nigeria has had on MTN.  It has only increased.

MTN, Econet Wireless (later became Airtel), Glo and Nitel each got a GSM license in 2001 after each paying $285 million in government fees.

Today, MTN’s subscriber share of the market is around 50% or less, their revenue share, however, is estimated to be at least 65% of the telecom market profits and everyone else (Airtel, Glo, 9mob and all the smaller companies) share the remaining 35%. NCC designated MTN as a dominant operator since 2013.

In 2018, the Nigerian Senate, Central Bank of Nigeria and the Attorney General of the Federation each began an investigation into MTN’s potential illegal repatriation of close to $9 billion from Nigeria to South Africa between 2007 and 2017 in addition to tax irregularities amounting to more than two billion dollars.

One third of the size of the Nigerian budget for that year was repatriated out of the country by MTN it was declared over that period. What was contentious then, is that all three government agencies alleged that MTN conspired with banks to repatriate the funds illegally by not getting the appropriate documentation done for such massive amounts but ended up settling for a miserly $53 million dollar payment.

I don’t intend to tackle the legality (or lack of) of the repatriation, but we would like to highlight that MTN repatriated more than 10 billion dollars in hard currency from Nigeria when the initial license fee paid was $285 million. 

Nigeria is adding close to five million people a year and getting poorer by the year as MTN is transferring hard currency back to its shareholders in South Africa at such a scale.

MTN, of course, has invested billions in infrastructure to create a successful business in Nigeria. But these billions, you can argue, were generated by the millions of Nigerian phone users and whole a portion got reinvested in equipment and infrastructure in Nigeria, the rest is shipped out as profit to MTN South Africa.

Because Nigeria doesn’t have fixed telephony infrastructure, Nigerians use their phone for every connectivity application. They use it to browse the internet, for social media, to collect information and exchange emails, to bank and exchange money, to download movies….etc.

The fact that the cellphone is so important in the life of ordinary Nigerians substantially compounds the dominance problem. MTN is effectively the largest phone company in Nigeria, the largest social media company, the largest banking services provider, the largest cable company, etc. just because of how Nigerians use their cellphones.

Why is the above harmful? One would say, we are Nigerians. We believe in open markets, and we encourage foreign investment and foreign presence among us. That is true, but the interests of dominant player’s sometimes (maybe most times), can diverge from national interests to the detriment of national goals. This happens for many reasons.

Firstly, the size of MTN means it can intentionally or unintentionally maneuver competition out of business to the detriment of the ordinary Nigerian phone user. Over the years, MTN has been allowed to swallow many of its smaller competitors directly or indirectly – The indigenous Visafone was bought by MTN in the year 2013.

The spectrum of the Indigenous Intercellular was bought by MTN in the year 2017 rendering them inoperational.  In 2023, MTN took over Natcom’s spectrum.

They followed this with an announcement that they had bought OpenSkys Services Limited, a company that got the spectrum from NCC and commenced the discussions to sell to MTN before they had even paid for it.

Why would the then EVC, Danbatta-led NCC and Minister Pantami’s supervisory Ministry of Communications & Digital Economy (“MoC”), then allocate a valuable government and Nigerian resource at depressed values to a private company (Openskys) that turns around and sell it at massive profits, with the approval of NCC and MoC, to MTN almost instantaneously?!

This is an example of how dominant companies can thwart and somehow “capture” the regulatory process to the detriment of open markets, competition and ultimately the national interests and the interests of the ordinary Nigerian.

These activities have allowed MTN to accumulate massive amounts of spectrum; substantially more than Airtel and all the other operators combined. A few days ago, we read about MTN’s discussions to enter national roaming services with 9mobile.

This means that 9mobile’s valuable spectrum will be used by MTN on MTN’s network effectively placing 9mobile’s spectrum under the control of MTN.

This transaction, if approved by the regulators, will further enhance MTN’s dominant position and of course hold one of the three competing GSM operators by the throat.

The new leadership of NCC is strongly encouraged to deny the agreement as it is not in the country’s best interest.

The NCC’s EVC, Aminu Maida and the Hon. Minister, Communications, Innovation & Digital Economy, Bosun Tijani should know better than follow in the path of the previous administration who by all measures appear to have been swayed over for whatever reasons by the size and position of MTN to allow them further their dominance on account of indigenous and other competition.

When Etisalat came to Nigeria in 2007, it came with a lot of fanfare. The Emirati government-owned entity brought Mubadala, one of the largest sovereign wealth funds in the world, with it. After a few billion dollars of investment and a few years, Etisalat Nigeria became bankrupt and, unable to compete.

It therefore handed over the operation to its debtors for free. They couldn’t achieve a critical profitable mass that was enough to compete with the dominance of MTN.

Even Econet couldn’t hold its own and its ownership changed several times until eventually Airtel took hold of the operation and somehow stabilized but still at a fraction of MTN’s market share.

What is next? How long can the likes of Airtel and Glo hold their own before they are weakened enough for the pounce? Like what is happening with 9mobile today!!

Interestingly, none of the companies that MTN acquired, or their spectrum were healthy when MTN made its move.

They were weakened to very bad financial levels before the pounce upon them by MTN. These moves come with a double benefit for MTN. They lose a competitor, and also acquire frequency spectrum which makes them more efficient and allows them to even become more profitable so they can pounce on their next prey.

MTN has become a league of its own and everyone else is competing for the crumbs. Nitel is gone.

Swiftnet reduced to a state where it is almost unable to pay its cost. Glo and Airtel are holding their own for now but how long before a curve ball exposes them to the paws of MTN.

Secondly, they say absolute power corrupts absolutely. It breeds a sense of entitlement and complacency.

This encourages behavior that pushes the lines of morality and social equity. We’ll give a few illustrations on how this applies to dominant companies that potentially believe they are above the law and the citizens they are supposed to serve.

An analysis was done of MTN Nigeria’s public filings with the Nigerian Stock Exchange over the past few years and realized that MTN Nigeria has repatriated around one billion dollars to pay dividends to its South African shareholders during 2021 and 2022.

In 2020, MTN Nigeria repatriated almost zero hard currency from Nigeria. All this changed when Ralph Mupita and Karl Toriola took over the leadership positions of MTN in South Africa and Nigeria respectively. In the next two years, 2021 and 2022,

MTN Nigeria repatriated almost one billion dollars (using official Dollars provided by the Nigerian Central Bank) so that they can pay the profits to their shareholders as dividends.

How could this have happened at a time when the country was going through a forex availability crisis and basic manufacturing and other critical sectors of the economy couldn’t even import goods to sustain their existence and serve the market? petrol line shortages, the prices of basic food staples multiplied and Nigerian companies shutting down and laying off their employees.

The story of Emirates Airlines suspending flights to the country is still felt because the government couldn’t repatriate under $100m of their proceeds depriving Nigerians the possibility of travel to one of their favorite destinations, yet, MTN repatriated almost 1 billion Dollars.

During the past few years, Nigerian students who had been accepted at universities in the United Kingdom and other countries have had their enrolments canceled and had to return home because they were unable to pay their tuition fees on time due to a lingering foreign exchange (forex) crisis in the Nigerian banking system.

How was MTN able to convince the then Central Bank Governor, Godwin Emefiele, to allocate almost one billion dollars to them at the official rate to pay its shareholders in South Africa during Nigeria’s darkest economic hour when students abroad were coming back because local banks couldn’t honour their few thousands of dollars or pounds in credit card lines?

This is a clear example of how national interests can diverge from the interests of a dominant operator to the detriment of the country and its people.

In 2015, we all remember how MTN repeatedly ignored the governments calls to register all their SIM cards at a time when the country was battling a fanatic insurgency threatening to destabilize the fabric of the nation.

Boko Haram and ISWAP insurgents were at the height of their intensity killing and ravaging Nigerian villages and were using unregistered SIM cards from MTN to communicate and avoid identification.

Comfortable with its dominant position, MTN turned a blind eye to the government’s requests to deactivate unregistered SIM cards in order to seek profits so that it can continue to pay its dividends.

Only when the government rightfully applied the legal code and hit MTN with a $5.2 billion fine, did MTN realize that it needed to sit up and take notice.

Of course, over time and through “negotiations” with the people in government then, the fine was materially reduced and MTN eventually paid less than a quarter of that amount. Some even question whether all the money made it into the official government coffers.

Just recently, a tribunal in Nigeria ruled that MTN has contravened the country’s tax laws and ordered MTN to pay a whopping 72 million dollars in penalties.

Why MTN that makes billions in profits cheat the government of 72 million dollars is an attestation of the psyche that comes with dominance. We are big and powerful: we can get away with it so we will do it!

This is a call to our regulators, in particular the Nigerian Communications Commission and the relevant anti-trust agencies to plan and push for a more distributed telecom industry that encourages more competition to the benefit of our cellphone users.

We should start by rejecting MTN’s thinly veiled attempt to take over 9mobile and consider ways to help the competition to flourish and grow.

We should bring in anti-trust and competition experts that have seen the ills of dominance and help unlock more potential in the market.

Regulators should not shy away from considering serious measures that have proven to be effective in other jurisdictions including potentially breaking up MTN vertically or horizontally. In 1982, in the USA, American Telephone and Telegraph Company (AT&T), one of the largest and most powerful monopolies of the 19th and 20th centuries was broken up into multiple companies.

The shift gave rise to many local providers and enabled a long lasting, innovative and vibrant telecommunications market which has endured and expanded for years.

At a time when Nigeria is trying to re-invent itself and unlock the potential of the largest black nation on Earth with a population expected to surpass that of the USA in few decades, we shouldn’t be afraid of pushing the envelope in our quest to compensate for the lost last decade.

The telecom sector is one of the most vibrant sectors of any economy in the world, not only in our country. It is not driven by companies who may want to scare us about their importance.

It is driven by modern day users who will cut their food intake to keep paying their phone bills.

This is where the power lies: with the users who’s interests are supposed to be protected by the regulators.

And NCC and others should make sure the power comes back to our citizens. It’s one thing we can do with some will power and thoughtfulness!  We should not be afraid to rise to the occasion.

*Olayinka Adigun, a Business Analyst writes from Alimosho, Lagos.

Econet which is now Airtel Nigeria began operation in Nigeria in 2021 and adopted a founding trading name Cybertel at a time when Tinubu was the Governor of Lagos. 

At the screening, while highlighting some of his achievements, Tinubu: said “I could remember that I brought Eron to this nation. Telecommunication is now a success today in Nigeria. I brought Econet. I helped them; they now want to adopt 5G; we started it. “Nigeria is rich.”

Victor Asemota’s Story 

Victor Asemota is a technology entrepreneur and investor who serves as a board member and advisor to leading fintech and investment firms across Africa. Asemota, who also worked at Econet during its early days gave his account of how Econet Wireless came into Nigeria.

According to Asemota, Lagos State was only involved in its founding through the acquisition of secondary shares after many deliberations had taken place amongst Delta State, Oceanic, and David Edevbie, who were major players.

He wrote on Twitter, “My uncle held a party for Tony Anenih Jr. after his wedding in 2000 in Benin City.“Many of the new state governors were in town and came for the party. He got five of them into his bedroom and pitched a company called ‘CyberTel’, which was supposed to bid for a GSM license. 

“Only Delta State was very keen on it. The others told us that they would get back. Cybertel merged into the consortium called First Independent Networks Limited, which was started by Bolaji Balogun and his team at City Securities Limited. It was a harrowing period”.

He added that he had to travel to Delta and Akwa Ibom to ensure the commitment of the state as FINL was supposed to hold 60% of the license holding company, and 40% went to the foreign partner.“We later selected a small company from Zimbabwe called Econet because we felt it was easier.”

He also revealed that “Econet was supposed to bring 40% of the license money and the technical know-how. We had the equity agreement as a shareholder and technical services agreement as operator of the license. That 40% never came. It was excuse after excuse. We finally had to go back to the states.

“The initial structure we had proposed was for the licensed entity, Econet Wireless Nigeria (EWN) owned by FINL and the technical partner to own 60% of the operating entity Econet Wireless Mobile (EWM) and the remaining 40% coming into that entity from states like Delta and AKSG.”

According to Semota, when the 40% from the operator wasn’t coming and other shareholders were leveraged to the hilt, state governments were allowed in to buy secondaries from existing shareholders who had covered the initial $285m license fee they didn’t bargain for, which caused the Shareholders approached states.

He said OANDO was also a shareholder, stating that Wale Tinubu (Oando founder) got Lagos State to buy their secondaries and come in. 

“That was the extent of the Lagos State involvement in the deal. His relative was the state governor, and it made it easier for OANDO to convince them. Tinubu didn’t even commit to Cybertel initially. Delta State and Oceanic saved ECONET. David Edevbie saved us all,” he said.  

Bidding And Licensing

In a PDP document dated 19 January 2001 and obtained by TechEconomy, Ernest C A Ndukwe, former Executive Vice‐Chairman, NCC, noted that Econet was successfully licensed.

The document titled “Digital Mobile Licence Auction – Final Result” noted: “The Nigerian Digital Mobile Licence auction concluded successfully at the end of Auction Day 3 Round 5. The Successful Bidders are Communication Investments Limited, Econet Wireless Nigeria Limited, MTN Nigeria Communications Limited.”

“The whole auction process has been completely transparent throughout, with the public being informed of all the details along the way. We can now look forward to four national operators delivering much-needed digital telephony services to the benefit of all Nigerians,” Ndukwe said.

Once the GSM licensing requirements were announced by the NCC, a lot of alignments and realignments were made by Econet.

According to Semota, before you go into bidding, you were meant to put $20m down which determines who you were going to work with.

He said the people who helped to do it in the case of the FINL consortium were Oceanic Bank and was based on a guarantee by the Delta State “that they knew us and would be part of the consortium. Some people didn’t even get to pay and others lost their bids.” 

“I hate it when people try to rewrite the history of things that were largely public knowledge barely two decades ago. Especially when those who were involved are all largely alive. That they didn’t talk before meant they didn’t take the people talking seriously.”

The Ghanian tech investor said the license fee was huge and a bank in Nigeria at the time needed 2 Billion Naira as paid-up capital. “The GSM license was roughly 20 Billion Naira. That was at least 10 banking licenses. HSBC Capital helped the Nigerian investors in Econet to pull that off.” 

Continuing, “It was the finest structuring I have seen in my life to date. We didn’t even know we had assets that could be leveraged. Some people are still suffering from the effects of that leverage today as they didn’t pay it off after the exit. $285m was raised after one month of work.

“I was in the same office with the HSBC Capital team daily for a month. Worked with late Osaze Osifo and his guys learning. I paid the rent for Econet offices at Fortune Towers myself after I approached NNB to provide a loan. Zenith gave the first 500m Naira for working capital. 

He revealed that Elias Igbinakenzua was the person he structured to deal with before he left Zenith Bank. “He is alive today. Without that loan, we were dead. Everything was on a shoestring budget and Bolaji Balogun was the one who tied most things together. He really needs to write his memoirs.”

Who is Bolaji Balogun?

 Bolaji was a co-founder and Director of Econet Wireless Nigeria. A notable banker and was part of the license bid auction team that led the capital raising and license bid auction process for the Econet Wireless Nigeria license.  

He planned and executed the $1.67 billion sales of Econet Wireless to Celtel, which remains Nigeria’s single largest successful exit from private investment. 

The new rates took effect on 19th of May 2022.

Below are the old and new tariffs respectively, according to this report are:

New tariffs:

Old Tariffs:

Pindula News had earlier reported the plan by Econet to increase its tariff after issuing statements to the customers.

Dear Customer,

Please note, we will review our Voice, Data & SMS bundle prices effective, Thursday 19 May, 2022.

To access Voice & Data bundles dial *143#

To access SMS bundles dial *140#

Visit www.econet.co.zw/services/bundles for more information.

*All other prices remain unchanged.

In Nigeria, Mobile Network Operators (MNOs) have also asked the industry regulator – the Nigerian Communications Commission (NCC) – to approve a 40 per cent increase in the cost of calls, SMS and data.

The operators under the umbrella – The Association of Licensed Telecommunication Operators of Nigeria (ALTON) –  said the telecommunication companies based their request for 40 per cent hike on tariffs for data and calls on the rising operational costs in the country.

ALTON in a letter to the Nigeria Communication Commission (NCC), titled ‘Impact of the Economic and Security Issues on the Telecommunications Sector,’ said the decision to hike charges was based on an increase in energy costs, which has raised their operating expenses by 35 per cent.

Their proposal means the price cap on phone calls will increase from N6.4 to N8.95, while SMS costs will also increase from N4 to N5.61 (READ MORE HERE).