Privatisaton Of NITEL/MTEL: A Monumental Fruad

By

Canice.Nwanaeto O. A.

febirac@yahoo.com    

It is amazing to hear what is happening in Nitel/Mtel one year after privatization. The fortunes of the two companies have so dwindled that you begin to imagine whether the core investor Transcorp actually paid for the purchase as claimed by BPE. Subscriber base has gone from 1.2 million lines pre-Privatization to less than 50,000 one year post- privatization. Earning has gone down from N1billion naira monthly in 2005 to less than a million naira one year after privatization.

Transcorp as a core investor has done nothing to refocus these two companies to a part of growth. I have doubts if Transcorp actually paid $500 Million.

If they did I think they should have been more serious to turn around the two companies to ensure recovery of their investment.

I remember vividly all the promises of Mrs. Ndi Okereke onyiuke on the day of handover by BPE. She said they have secured one Million Euro from a European Bank to invest in Nitel/Mtel. She also said they are partnering with British Telecom and Etisalat as technical and financial partners respectively. And I am sure the two companies were part of the strength in the Transcorp bid process. You may ask where the two companies are today. BT has left sighting issues bordering on lack of funding by Transcorp and non adherence to corporate governance as reasons. Etisalat has acquired 40% stake in Mubadala the newest licensed GSM Company in Nigeria as they couldn’t work with Transcorp.

The state of Nitel/Mtel under Transcorp is so pathetic that if nothing is done urgently the companies are heading for liquidation. The debt profile continues to rise. Mtel for instance owes Interconnection bills to the tune of over N5billion, local contractors over N2billion, Banks over N8 billion as well as their staff. Staff that were never owed salary before privatization have not received any allowances this year- housing allowance, Education, club and furniture and also July salary. It is pathetic when you hear the suffering staffs are going through in an industry that is a cash cow. Hospital access was stopped immediately after they take over - this resulted in the death of two staff this year as they were unable to get medical care when they were ill. There is a lot of confusion going on at the top management of Nitel/ Mtel and also Transcorp. The board is divided so also is management. In Mtel, some members of management are representing the interest of the chairman and don’t respect any other person. I learnt some officers do not report to their immediate boss rather to the chairman who is not and executive chairman. It is so funny how a company can be run that way. Some management members especially those that were in the company before privatization are not carried along and seem not know the policy direction of the company if there is any. They are clicks here and there- some working for the GMD, some for the chairman whiles others for the government members in the Board. These intrigues and power play will keep the companies perpetually in comatose.

The greatest asset they have, the legacy staff which are experienced and adequately trained are not appreciated and taken in confidence hence left to riot. A lot have moved to other competing networks at salaries five to seven times their pay package. Over 100 staff or more in Mtel have resigned especially the engineers. If they are not good as portrayed by Transcorp I don’t think others would poach them. More will go with the coming of Mubadala. Transcorp presently cannot attract any quality staff into Nitel/Mtel because they cannot afford it yet they treat the ones they have which are among the best in the industry with disgust.

Recently their GMD have been talking about restoration of network to several cities in Nigeria.

This programme can not work when the staffs that suppose to drive it have not been paid; when you have no money to resolve issues like servicing of generators and fuelling of the base stations. How can it work when Board and management are not working in the same direction? I learnt management requested for about N2 billion for initial stage of restoration and less than N10 million was released. I think Transcorp should realize that Telecom business is not Popcorn business rather a high ticket investment. Look at companies like Celtel, Glo and MTN despite their holding in the industry presently; they still invest billions of dollars yearly to expand their network. You can not operate this business without money. Since they don’t have money that is the more reason they need financial partners if they are serious. I think it is high time government revisit this privatization programme of Nitel/Mtel because it is a big fraud by the last government. I can bait anything that Transcorp did not pay any money for this acquisition. The national assembly should hasten up and institute a probe on all privatization under the last administration starting first with that of Nitel/Mtel. They should ensure that due process was followed and Nigerians have adequate benefit for this privatization which they are not getting presently. If government can review the sale of refineries to Dangote Bluestar (which we all know has the capacity to turn around the refineries) why not Nitel/Mtel that is in the hands of mediocre Transcorp. Remember government still has 49% interest in these two companies and must protect their own stake in this investment. If they don’t do this urgently I bait their holding will be worthless in the next one year. Again my view is that the sale of Nitel/Mtel to Tanscrop is the biggest fraud in government privatization and should be revised. Transcorp has shown in the last one year that they cannot reposition the two companies. They don’t have the financial capacity and cannot attract any from financial institutions in Nigeria and around the world. As a company they are highly geared and Banks will find it difficult to lend fresh funds to them especially now their cash flow is nothing to write home about. Secondly they don’t have the technical ability and competence yet so greedy, that they don’t want to partner with others. What they have done in last one year they took over showed their lack of understanding of the industry and the way and how to restructure it. Am sorry to say that if they continue this way and no action is taken by government the two companies will collapse. This brings us to the issue of the bidding process. The Orascom bid that was turn down by BPE to make way for Transcorp was the most appropriate. $250 million for 51% stake in Nitel, to assume all liabilities including pensions, not to sack any staff and promise of injection of billions of dollars to refocus the two companies would have benefited Nigerians and the industry more , rather than Transcorp. Transcorp $500 million purchase makes no meaning because government took over the responsibility of pensions which she has expended over $500 million even though the workers of the two companies were short changed. They did not get their actual pension package from BPE. BPE and Transcorp sacked over 8000 workers and another 300 or more have resigned on their own as a result of instability in the place right now. Even with the downsizing Transcorp still cannot not pay salaries. Note that, Nitel/Mtel salaries are the worst in the industry. A staff in Celtel, MTN or Glo earns about six times more than their counterparts in Nitel/Mtel. The present CEO of Mtel I heard earns less than N250, 000 monthly. This does not show seriousness both on the part of the new owners and the CEO. The last CEO before privatization was earning above N1million per month. NITEL/MTEL privatization should be revoked with immediate effect and government ensures that only reputable companies that have the expertise and financial capacity allow to run Nitel/Mtel. They are a lot of companies who meets these criteria that are desirous to play in the Nigerian Telecom market if due process is followed. Note it is only when this is done that Nigerians can have the full benefit of a deregulated Telecom sector. NITEL/MTEL have the capacity if refocused and well managed to bring the much awaited competition that will force down tariff and provide quality service to Nigerians . Canice.Nwanaeto O.A.