Nigeria’s 4th largest GSM operator 9Mobile could have a new owner in a couple of weeks as 5 bidders have been shortlisted from the initial 16 that showed interest. The top five bidders who made it to the next stage of the bid are Airtel, Globacom, Smile, Helios, and Teleology Holdings Limited. Out of the five, one will be the eventual buyer in a matter of weeks.
Why Airtel and Globacom want 9Mobile
User data from the Nigerian Communications Commission (NCC) as at October 2017, shows MTN had 50.7 million subscribers or 36.14% of Nigeria’s GSM market. Globacom was the second largest operator with 37.4 million or 26.6% of the market share and Airtel 35.0 million or 25%. Either firm taking over 9Mobile and its 17.1 million customers, it would be at par with MTN.
For Globacom, landing 9Mobile will increase its dominance in terms of data subscribers. Globacom had the second largest number of internet subscribers at 26 million, slightly behind MTN which had 32 million internet subscribers amounting to 1/3rd of the 93 million subscribers that accessed the internet through GSM as at October 2017. As call revenue deepens, income from data subscription is the next frontier for telco operators in the country.
What led to the sale
9Mobile (then known as Etisalat Nigeria) defaulted on a 41.2 billion loan it had obtained from a consortium of banks led by GT Bank. The default led to parent company Etisalat of the UAE pulling out and the banks threatening to take over the firm. They were however prevented from doing so by the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC). An interim board was subsequently appointed.
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The lenders were prevailed upon by the Central Bank of Nigeria to hold off on taking provisions for the syndicated loan and agreed to extend it after the apex bank intervened back in July this year.