Mergers, Acquisitions and Financial Results

Barely three months after Mobile Telecommunications Limited (MTel) was taken over by its new owners, Transcorp, there are indications that the mobile communications firm is yet to find its feet in the increasingly competitive industry.

Its market share, investigations revealed, has further declined from its December 2005 rating of five (5 per cent) percent to almost one per cent. This is a far cry from its eleven per cent (11 per cent) market share way back in 2002. MTel, the mobile communications subsidiary of the Nigeria Telecommunications Limited (NITEL) is said to have also depreciated in terms of subscriber base. It is now down to about 70,000 active customers from its December 2005 record of 1.2million active customers on a network hosting a total of 1.4million subscribers.

It was gathered that over the past two months only 200,000 customers have made or received calls at least once on their MTel lines. The drop in patronage may not be unconnected with the collapse of most of its base stations in different parts of the country particularly Lagos, Ibadan and Benin-City due to lack of maintenance arising from the loss of some of its key technical personnel in the course of the company's privatisation and transition from a state owned firm to a private sector organisation.

Also blamed for the rather stagnated position of the firm is the seeming lack of working capital. MTel and its parent company, NITEL were acquired in a negotiated deal that had Transcorp as core investor, British Telecom as technical partner and until the last minute, Etesalat, the Middle East firm that was initially brought because of its financial muscle. Observers believe that since Etesalat pulled out of the deal, it has been an uphill task for the core investor, Transcorp even to fulfill the primary obligation of paying the $750million bid price. It took the intervention of some privatisation-friendly banks to bail Transcorp out of falling into the same pit that previous bid winners fell in the protracted privatisation history of NITEL.

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