Posted by By Lesley Stones on
Telkom is said to be honing its bid for 51% of Nigerian telecommunications operator Nitel in a move that may bring in new partners.
Telkom is said to be honing its bid for 51% of Nigerian telecommunications operator Nitel in a move that may bring in new partners.
Telkom's bid for Nitel's fixed and mobile operations was submitted in partnership with Vodacom, which is 50% owned by Telkom.
Vodacom's previous abortive efforts to enter Nigeria in its own right may count against it when the winner is chosen. That may see Telkom rework its consortium to bring in other partners, particularly other bidders, which Nitel short-listed and were now preparing their formal offers.
Telkom's corporate communications executive Lulu Letlape said: "Telkom has not finalised its partners for the Nitel bid."
Vodacom CEO Alan Knott-Craig said he was not aware of any moves to rework the deal and Vodacom was still a part of the bid.
In their preliminary submissions, Telkom proposed holding 60% of the bidding consortium and Vodacom 40%. They told Nitel: "Telkom and Vodacom believe that, jointly, they have the necessary capabilities, resources and experience to successfully partner ... as shareholders of Nitel."
But Vodacom may have to smooth ruffled Nigerian feathers or emphasise its commitment to the Nitel bid in preference to its other efforts to enter that lucrative market. In the past, Vodacom briefly held a management contract with Nigeria's cellphone operator V- Mobile and planned to invest in it.
But the deal collapsed when Vodacom grew uneasy with some of V-Mobile's corporate practices.
The pull-out saw Vodacom waste R53 million and fire its deputy CEO. It has since rebid for a 51% stake in V-Mobile, this time in partnership with UK-based Virgin Mobile.
V-Mobile cannot sell any shares until a legal clash instigated by its 5% stakeholder Econet is resolved, as Econet claims to have a pre-emptive right to buy the shares for itself.
Vodacom has not said whether it would prefer to win the Nitel deal or the V-Mobile deal, but V-Mobile is a direct rival to Nitel's mobile subsidiary M-Tel.
The five other companies shortlisted to bid for Nitel are MTN, Huawei, Celtel, Orascom and Newtel, a Nigerian consortium.
But John Stallard, a senior product manager with Hauwei, a Chinese telecommunications equipment manufacturer, said they had decided not to pursue its bid.
But that may not rule it out of becoming a part of Telkom's bid. Stallard confirmed that Hauwei recently hosted a Telkom official in China, although the visit was related to a project in SA.
Telkom is also understood to have approached the Egyptian operator Orascom about combining their bids.
Telkom has now paid $35,000 to access Nitel's financial and operational data to conduct due diligence and calculate a bidding price. That is essential, as the scanty information on a website run by Nigeria's Bureau of Public Enterprises details Nitel's financial performance only up to 2002.