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Friday, January 06, 2006

Ajayi wants NITEL unbundled

Following the unresolved sale of the Nigerian Telecommunications Limited (NITEL), President of the Nigeria Internet Group (NIG) and Managing Director, PiNet Informatics, Mr. Lanre Ajayi, has advocated for the unbundling of the national carrier, to make it more viable.

ITREALMS recalls that last week, the Bureau for Public Enterprise (BPE) announced the failure of another auction to sell the corporation due to the under pricing of NITEL by Orascom Consortium of Egypt, which priced $256.5 million.

NITEL is the nation’s first telecom carrier embodied in fixed line and mobile telecommunications company, MTel and is owned 100 per cent by the Federal Government (FG).It was incorporated as a limited liability company in December 1984, which was a product of the merger between the telecommunications arm of the defunct Posts and Telecommunications Department (P&T) of the then Ministry of Communications, and Nigerian External Communications Limited (NET) and commenced operations on January 1, 1985.As at June 2004, the organization claims it has installed fixed telephone network of about 720,000 lines, while approximated 500,000 was activated.Due to the under pricing of the corporation, BPE has said it would report back to the National Council on Privatization (NCP) under the office of vice president before making its decision known.

Reacting to the Orascom’s pricing which did not reach the price paid by MTel, a subsidiary of NITEL to obtain its Global System for Mobile communications (GSM), Mr. Ajayi, said that as much as it is important to deregulate the telecoms sector by finally privatizing NITEL, he did not support the sell at all cost.

“I do not think it is right to sell it at a give away price,” he declared, stressing that doing so would be counter productive.

NIG President, who is a former NITEL’s employee, also said the objective of massive rollout which the sale was anticipated to achieve would be defeated.

He noted that this would degrade the corporation, hence, “the buyer
may simply be complacent after recouping the very low price at which the company
was bought with some profits”.


The way forward, he said, is to unbundle NITEL into many components which may be sold separately.

“I am positive that the SAT-3 cable would attract good pricing from one of the existing operators and the mobile service (MTel) would attract good attention from international operators, who may be interested in just the mobile service,” he said.

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