Privatization of Nigeria’s State Telecoms Company NITEL Underway
According to Reuters, there are now 13 investors interested in the purchase of at least 75% of Nitel, the state telecoms company which has been undergoing this privatization process for several years.
The Bureau for Public Enterprises (BPE) is evaluating both local and international bids from as far away as Spain and India.
Nigeria is a particularly attractive to investors, given it’s Africa’s largest market with a rapidly growing middle class. Not only is it Africa’s most populous nation, but it contains the world’s fastest growing mobile markets, adding 7 million new subscribers in just the last quarter of 2008, and has overtaken South Africa to become the biggest market on the continent, as reported by Reuters.
President Umaru Yar’Adua last week gave the company’s new Board a 60 day deadline to seal the deal.
Nitel was almost sold in 2001 and 2005, however preferred bidders in 2001 couldn’t come up with the sale price of 1.3 billion dollars. While in 2005 an Egyptian company attempted to buy the company for a deep discount at around 250 million dollars.
Over the last decade, Nitel’s infrastructure has been mismanaged giving to the loss of 80% of its business. While the company ceded significant market share to other players in the industry, it’s fixed lines have been debilitated and will require significant investment to make them functional. However given the scale of this economy and the growth forecasts for the telecoms sector in this region, it may be worth the investment.
The telecoms industry is the fastest growing business sector in Africa, with growth forecasts that exceed any other region. As other ancillary products such as mobile banking emerge as increasingly popular products, the opportunities for the this sector in most African countries are immeasurable.