NIGERIAN GOVERNMENT TO APPOINT BT TO SELL SAT3 FIBRE CAPACITY INDEPENDENTLY?

Telecoms

  According to a report in Technology Times, the Nigerian Government is on the brink of appointing British Telecom to sell capacity on the SAT3 fibre cable linking it to the rest of the world. It will make Nitel divest itself of the high-capacity transmission facility.

  Government sources say that even though details of the contract are yet to be announced, approval has been given the consulting company to manage SAT-3. BT Consulting is expected to open up the revenue potentials of SAT-3 through an autonomous holding entity for the full scale commercial operation of the submarine optical fibre infrastructure that carries commercial international traffic for other operators.

  The SAT-3, with its Nigerian end landing in Lagos, forms part of the 120-Gb/s South Atlantic Telecommunications Cable No. 3/West African Submarine Cable/South Africa-Far East (SAT-3/WASC/SAFE) system spearheaded by Telkom, the South African fixed line operator. The submarine cable is owned by a consortium of 36 companies which include leading African telecoms companies among them Nigeria's NITEL that contributed about $50 million while South Africa's Telkom SA staked USD85 million into constructing the USD650 million link that went into commercial service in April 2002.

  Minister of Communications, Chief Cornelius Adebayo had earlier hinted of the divestment plan in an interview when he confirmed to Technology Times that plans are underway to sell NITEL but declined providing details when he said that, "I can't sell NITEL. You will have to ask the BPE."

  Bureau of Public Enterprises (BPE) officials said anonymously that they are yet to receive details of the fresh plans to sell the public national carrier. Reacting to questions surrounding the issue of SAT-3, he said, "Why must government sell NITEL with SAT-3? We have an obligation to the people of Nigeria. We can't sell NITEL cheaply." He however referred further questions on the planned sale to BPE, the government privatization agency.

  Amid the build up of fresh interest in the sale of NITEL, sources said that some groups jostling for the 51 per cent government stake were surprised to learn that far reaching decisions to divest SAT-3 cable from NITEL ahead of its sale. Technology Times had reported reported that various Nigerian, South African and other foreign investors are already in the race to acquire control of NITEL.

  Rather than the entire NITEL bouquet of service, sources said investors have their eyes focused on MTel, the government mobile cellular operator and the SAT-3, the submarine cable link. The interest in MTel is driven by its potentials for profitability induced by the rapid uptake of cell phones as against fixed lines in Nigeria.

  The other reason is that the high bandwidth SAT-3 link supporting high speed transmission of voice, video and data offers huge market potentials among operators seeking alternatives to the expensive satellite links used to carry their international telecoms traffic outside Nigeria. Also part of the move, the new owners of the privatised NITEL may inherit the existing management contract that government has signed with Pentascope International of the Netherlands appointed to turn around the value of the company to enhance its sales value for privatisation.

  Federal Government of Nigeria had in March 2003 signed a three-year Management Contract with Dutch Consultancy firm Pentascope International for the turnaround of NITEL and MTel. This was the fallout of the botched privatization of NITEL after Investors International London Limited (IILL) the preferred bidder, failed to pay up the balance of its $1.317 billion price for NITEL when it won the bid for 51 per cent stake in November 2001. Technology Times confirmed that Singaporean investors, the Chagouri family which owns Motophone, may feature in the new race for NITEL.

  NewTel, a consortium that made an unsuccessful bid in the January 2001 auctions of GSM licences may also participate. NewTel is expected to feature Kwame Amuah, Chairman of the team as well as son-in-law to former South African President Nelson Mandela. Amuah, who participated actively in South Africa's controversial second national operator (SNO) bid, may be lining up for the bid with Moletsi Mbeki, brother of South African President Thabo Mbeki. Also part of the NewTel team are Tokunbo Sijuade, son of the Ooni of Ife, Oba Okunade Sijuade; Amuah's advisor Andre Gyenifie; Lagos lawyer Seye Kosoko and Seye Oladapo, a Director in National Bank of Nigeria who doubles as Financial Director of the group while the Chagouris are expected to feature in the reconstituted NewTel Consortium.

Technology Times