Mergers, Acquisitions and Financial Results

Nigeria-based fixed wireless operator Reltel has said that an Indian firm is interested in acquiring a majority stake in the operator at a cost of US$55mn. Although Reltel executive vice chairman Kenneth Aigbinode did not disclose the name of the Indian firm, he stated that the cash injection would enable Reltel to move forward in expanding its operations to reach major cities across Nigeria. According to BMI forecasts, mobile penetration rates are expected to reach 20% by end 2006, rising to 45% by 2009, illustrating that the market has further room for growth.

The move by the Indian firm comes ahead of the introduction of a unified licensing regime due in late February 2006, when it is expected that all telephone operators in Nigeria will be able to provide mobile services on a regional basis. This will mean that any telecom provider will be able to enter markets that have until now been exclusive to mobile operators. Moreover, mobile operators will also be able to provide fixed line services in addition to becoming international gateways.

Reltel, which has around 100,000 users and operates services in Lagos, Port Harcourt and Onitsha, has already secured a US$20mn financing deal from the China Development Bank. This has enabled it to install three major switches provided by Chinese telecoms equipment vendor Huawei in the three areas from which it operates. Meanwhile, Reltel is also said to be raising a further NGN7.5bn (US$58mn) from Nigerian private investors.

Business Monitor International