Deadline set for Nitel bidders
The privatisation of Nigeria's PTT is edging closer after the government set a deadline for bidders to come forward. It is hoped that a major international telecom company will buy up the 51% share on offer.
Nigeria has begun the process of privatising Nitel, the African nation’s state telephone company.
The National Council on Privatisation said it had invited international telecoms companies to express an interest in buying a controlling share in the operator, with between 40 and 51 percent up for grabs.
The government plans to retain 40 percent of the company, with everything that’s left going to the Nigerian public.
The successful bidder will also gain management control of Nitel, and it’s mobile phone company M-Tel, along with its recently-won 2G network license. Nitel paid $285 million for the 2G license a few months ago.
The company is estimated to be worth around $2.7 billion. It currently has 720,00 lines in place, but only two thirds of those are actually connected. M-Tel currently has 30,000 analouge subscribers.
In order to be in with a chance of winning control, bidders must be “international telecoms operators with a record of successful performance in one or more telephone companies.”
It is generally believed that the conditions have been tailored to attract interest from major Western operators such as Vodafone, BT and Deutsche Telekom.
Vodafone already have a string of interests in Africa, including a successful operation in Kenya. France Telecom have also been sniffing around, but have generally stuck to the French-speaking nations in the North.
Each applicant has to have a long-term management plan and pay a non-refundable deposit of US$25,000. Operators have until June 11th to put bids in, and a shortlist will be drawn up 10 weeks after that.
Companies who make the list will be invited to place cash bids for the share, with the biggest offer winning.
The NCP hope that the combination of beauty contest and straight auction will mean a high price is paid for the company, while ensuring that quality of service does not suffer.
The much-delayed sell-off is sure to please the World Bank and Nigeria’s other creditors, who see privatisation as the best way for Africa’s most populous nation to raise much-needed cash.
The Nitel deal was originally meant to be completed by the end of last month, but a new target has now been set for September