Nigeria’s National Council on Privatisation (NCP) has given the Bureau of Public Enterprises (BPE) approval to begin searching for investors to acquire 51% equity stake in Nigerian Telecommunications (NITEL) and its mobile arm, M-Tel. A statement issued yesterday by the head of public communications, Chigbo Anichebe, stated that the approval followed extensive consultations and negotiations between the two organisations, current owner Transnational Corporation (Transcorp) and other stakeholders to begin the process of engaging a new core investor with the appropriate resources to take over the management of the struggling telco.
It is reported that prospective investors must be reputable telecoms operators with experience in the sector, must possess at least two million fixed or GSM lines, experience of expanding fixed and mobile networks and a minimum net worth of USD500 million. Furthermore, if the prospective investor is a consortium, the operator must own at least 51% equity in the bidding vehicle.
The federal government sold it 51% stake in NITEL to Transcorp for USD750 million in November 2006, retaining a 49% interest. Since then the telcos initial 500,000 fixed lines in service have dropped to about 45,000, its workforce has declined from 12,000 to just 2,000 and the company is USD500 million in debt. In February 2009 Transcorp agreed to divest part of its shareholding in the telco and the sale process will happen gradually over the next six months.