In keeping with its Corporate Governance Code which has become fully active for the telecom industry, the Nigerian Communications Commission (NCC) said it is regularly conducting health-checks on the financial wellness of all telecommunication companies in the country. The measure is to avert a recurrence of the kind of financial storm that rocked the Etisalat which forced the exit of its UAE component.
In an interview with Bloomberg, the CEO and Executive Vice-Chairman of the NCC, Prof Umar Garba Danbatta, said the commission is assessing the health of MTN Nigeria, Bharti Airtel and Globacom to ensure that they all do not fall into the same pit. And if they have “issues that can be addressed”, we will try and resolve them.
Danbatta said that the regulator is introducing more regular and tougher financial checks on all the country’s biggest service providers. “These are all measures we’re putting in place to ensure the survival of 9mobile and prevent a repeat of what happened,” he told Bloomberg.
MTN Nigeria leads the market with over 45 million subscribers, followed by Globacom with more than 38 million subscribers and then Bharti Airtel with over 35 million subscribers. Troubled 9Mobile (formerly Etisalat Nigeria) has about 16 million subscribers having lost over three million subscribers as its financial and ownership crises persisted.
In 2017, the Nigerian Communications Commission and the Central Bank of Nigeria intervened to save Etisalat Nigeria from collapse after it failed to pay the remaining $589 million from a $1.2 billion loan it took from a consortium of 13 banks. The lenders seized control of a 45% stake from the primary investor Abu Dhabi’s Emirates Telecommunications Corp (Etisalat International).
9Mobile now has a new buyer: Teleology Holdings with a winning bid of $500 million. Teleology Holdings has an asset portfolio of about $11 billion to fulfill part of NCC’s mandatory stipulations that the new owners of 9Mobile have a healthy financial capacity to ensure the company transit from its current financial challenges to the path of sustainability and profitability.
At the sensitisation workshop on the Code of Corporate Governance hosted by the Commission in Lagos on August 15, last year Danbatta put into perspective the essence of the Code: “The sector continues to contribute incrementally to the GDP of the nation which currently stands at 9.8 per cent, notwithstanding the impact of recession on investment flow. That is against 8.5 per cent in 2015 and less than 1.00 per cent in 2001. Factoring in direct and indirect investments in the telecoms sector over the last sixteen years, it has pulled in investment of over $68 billion and when the impact of these local and FDI are factored in, the contribution of the sector would even be higher than stated.
“The sector has been showing sterling performance due to quality of regulatory oversight provided by the Commission. The Code of Corporate Governance for the Telecommunications Industry was developed to raise the standard of leadership and management in the sector to sustain the sector’s leadership role as drivers of the overall growth of the national economy”.
The EVC believes strongly that the introduction of the Code would give spur to a new phase of transparency especially on how investors’ funds are managed. It is in tandem with the 8-point agenda for telecoms which he unfolded upon assumption of office.