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Key asset in doubt as sale of Nigeria's Nitel nears

Posted by Reuters on 2005/11/07 | Views: 483 |

Key asset in doubt as sale of Nigeria's Nitel nears


Confusion surrounded the imminent privatisation of Nigeria's state telecoms company Nitel on Monday as officials and investors gave conflicting accounts of whether a key asset would be included in the sale.

ABUJA, Nov 7 (Reuters) - Confusion surrounded the imminent privatisation of Nigeria's state telecoms company Nitel on Monday as officials and investors gave conflicting accounts of whether a key asset would be included in the sale.

Excluding the SAT-3 underwater cable, which is the gateway for international calls and Internet connections to Africa's most populous nation, would slash the value of one of the government's flagship privatisations.

Nigeria is the world's fastest-growing telecoms markets, with a total subscriber base that leaped from half a million in 1999 to over 17 million now, according to the sector regulator. Almost all the growth has come from private companies, especially mobile operators.

Asked whether SAT-3 was included in the Nitel sale or not, Communications Minister Cornelius Adebayo told Reuters: "I'm not in charge of the sale, but my understanding is that it is not."

Adebayo referred detailed questions about the sale to the Bureau of Public Enterprises (BPE), the privatisation agency. A spokesman said the BPE was working on the premise the sale would include SAT-3 and it had not been told otherwise by government.

"The companies participating in Nitel's privatisation did their due diligence based on the government's position that SAT-3 is part of Nitel. They understand that, so there is no confusion over the issue as far as the BPE is concerned," said the BPE spokesman, Joe Anichebe. ADVERTISEMENT



But a senior executive from one of the companies bidding for Nitel said they had received confirmation that SAT-3 would not be included in the sale. The executive, who spoke on condition of anonymity, did not say where this confirmation had come from.

"It changes the name of the game somewhat. We're re-assessing the situation internally. No decision has been taken," said the executive.

An official from another bidder said they were still seeking clarification on the issue.

The BPE shortlisted six bidders in July. They are Chinese equipment vendor Huawei Technologies [HWT.UL], Egypt's Orascom Telecom , South African firms Telkom and MTN Group , Celtel, which was acquired in May by Kuwaiti telecoms operator MTC , and a little-known company called Newtel.

The BPE's Anichebe said bid documents had been sent out last week and the sale would be concluded by early December. The date has slipped several times already.

A previous attempt to privatise Nitel collapsed in 2002, when the winning bidder, a little-known British firm, failed to honour its $1.3 billion offer. It would have been the largest privatisation in Africa had it gone through. Nitel in April signed contracts worth several hundred million dollars to deploy hundreds of thousands of new fixed wireless lines on the CDMA (Code Division Multiple Access) platform. CEO Albert Mashi said the deployment was going ahead.

"During the last privatisation they said 'do nothing' and then the privatisation process collapsed and we were rolled back many years, so we cannot wait," Mashi told Reuters.

"Let us continue to do something and once we do a wise investment, anybody can take over and use it," he said.

Mashi declined to comment on SAT-3. (Additional reporting by Tume Ahemba in Lagos)

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