Bureau of Public Enterprises (BPE) has disqualified GSM license holders (MTN, Etisalat, Zain and Glo) from buying Mtel, the mobile arm of Nitel, Nigeria’s beleaguered national carrier, Nigeria CommunicationsWeek has learnt.
BPE charged with the overall responsibility of implementing the Nigerian policy on privatization and commercialization has also said that Globacom, the second national carrier is ineligible to purchase a bundled Nitel as it would leave Globacom with two SNO licenses and would hence, be anti-competition.
Christopher Anyanwu, director general of BPE said the decisions were reached following the advice/input of the Nigerian Communications Commission (NCC) on the on-going privatisation of Nitel.
The full text of remarks by Anyanwu on the advice by the NCC on the privatisation of Nitel at a special press briefing in Abuja yesterday (Thursday, October 15, 2009) read:
• Recall that the advertisement for expressions of interest from prospective investors for the acquisition of at least 75 % equity in Nigerian Telecommunications Limited (NITEL.) was published locally and internationally in July 2009 and the deadline for interested bidders to express interest will close on Monday, October 26, 2009.
• The companies that have submitted their applications are Etisalat Nigeria (EMTS); Omen International Limited (BVI); Summit Group; MTI Consortium; Finetek Consortium; MTNL Limited, India; and Globalcom Ltd. Others are MTN Nigeria Communications Limited; Anas Network Services Limited; Telefonica Consortium; Metro PCS Communications Inc; Brymedia (W.A) Limited; Galaxy Backbone Plc; and Conau Limited;
• Following our letter to NCC seeking advice/input on the on-going privatisation of NITEL, the telecommunications regulator has obliged the BPE with its opinion;
• NCC agrees that NITEL should be unbundled into units and each sold separately with all bidders free to buy any combination of units subject to the following regulatory restrictions;
• That the present GSM license holders (that is, MTN, Etisalat, Zain and Glo) are disqualified from buying the mobile arm of NITEL (that is, M-TEL) if NITEL is sold as a single unbundled unit given that they are presently holders of GSM licences;
• To NCC, the purchase of M-TEL by any of the present GSM holders would present competition challenges and will conflict with the regulator’s guidelines and licensing conditions;
• Given that Glo and NITEL hold Second National Operators (SNO) licences, NCC ruled that Glo is disqualified from purchasing a bundled NITEL as it would leave Glo with two SNO licenses and would hence, be anti-competition;
• Nonetheless, NCC pointed out that any of the local operating firms can purchase NITEL alone without M-TEL and SAT3;
• The regulator stated that a reserved price tag should be placed on each unbundled unit of NITEL in proportion of its potential market value and asset base.
• NCC subsequently noted the additional advantages of the unbundling strategy and on NITEL’s licence assets;
(A) OPERATING LICENSE
IT said the SNO license consists of the following individual licenses:
(a) Digital mobile license;
(b) PNL (fixed wireless land line);
(c) Long distance operators’ license;
(d) (i)International gateway license
(ii) International cable landing right license
(e) Value-added licenses (ISP and Pre-paid card, e.t.c)
(B) SPECTRUM LICENSES
(a) 1900 MHz band—CDMA fixed wireless spectrum
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(b) GSM Spectrum (part of DML licenses) (900 MHz & 1800 MHz bands)
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(c) Various microwave frequencies shared with other operators
(d) NCC however noted that the Microwave frequencies in the 4 GHz band and below have been re-farmed and assigned to other services.
SUGGESTION ON UNBUNDLING
The regulatory agency went ahead to suggest that NITEL be unbundled into the following components:
• DML Licence and Infrastructure (M-TEL)
• Long Distance License and Infrastructure (fibre + microwave)
• International Licenses – 3No International Gateway and SAT-3 Submarine Cable Access
• Fixed Network – CDMA fixed wireless, digital switches, external line plants cable network, metropolitan fibre cable networks. It noted that the CDMA fixed wireless network could be upgraded to a CDMA mobile network if the purchaser obtains a universal access service license; and
• Value Added Services Licenses; i.e. Internet service provider, prepaid card, coin box, internet exchange point, etc
ADVANTAGES OF UNBUNDLING
(i) NCC said the suggested unbundling line will help BPE overcome some of the regulatory barriers;
(ii) Adding that each buyer will likely pay a higher price for the component it values most important for its strategic plan. It will thereby enable government to make more money from the entire privatisation process;
(iii) Small and medium-size operators can participate in the process, thereby increasing the number of players and increasing the probability of getting a buyer for each component part. The more the number of participants, the more the competition for the purchase of the items.
090 ANALOGUE EQUIPMENT
On the 090 Analogue equipment, the NCC delivered the following verdict: “Telecommunications is a fast-changing industry, hence equipment and systems have tendency to become obsolete very quickly. 090 analogue mobile equipment belongs to the first generation mobile technology (1G) making use of TDM switches and analogue air-interface. Modern networks are already being upgraded to internet protocol (IP) Soft Switches and 3G air-interface equipment, while trials are already being conducted on Fourth Generation (4G) technologies. 090 equipment has no chance of competing with modern equipment in terms of service provisioning and hence has virtually no market value.”
Dr. Christopher Anyanwu
October 15, 2009
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