Nigeria revokes sale of NITEL to Transcorp

2 Jun 2009

The government of Nigeria has taken back control of the country’s former telecoms monopoly NITEL and its wireless arm M-Tel, citing a lack of investment and unpaid debts in the three years since local firm Transcorp took over the telco. Reuters reports that the National Council of Privatisation has ruled that Transcorp breached its contract, having failed to meet its obligations to invest NGN8.9 billion (USD60.9 million) within 100 days of the takeover, and had an unpaid debt of NGN17 billion. The government will take control of NITEL until a new core investor is found.

According to TeleGeography’s GlobalComms database, the federal government sold it’s 51% stake in NITEL to Transcorp for USD750 million in November 2006, retaining a 49% interest. Since then the telco’s 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 in late March the Bureau of Public Enterprises (BPE) announced it was offering a 51% stake in the fixed line operator and 100% of its mobile unit. Last week Nigeria’s anti-corruption police charged the head of Transcorp and two other employees with fraud for embezzling around USD110 million belonging to NITEL.

Nigeria, ntel (formerly NITEL/M-Tel)