" ITREALMS: Celtel swallows Vmobile

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Wednesday, June 07, 2006

Celtel swallows Vmobile

Features of the week:

Vmobile, one of the nation’s leading Global System for Mobile communications (GSM) operator, has evolved yet into Celtel Nigeria, another form that would entail total rebranding and reintegration, reports REMMY NWEKE.

Change they say is constant, and for those who desire it, challenges are likely to come on their way.

For Vee Network Limited, trading under the name Vmobile, another change was announced last week by the officials of the GSM company, owing to the latest completion of transactions between Vmobile and Celtel, a subsidiary of MTC conglomerate of Kuwait.

Vmobile journey so far

Since its incorporation in 2000 and subsequent roll out in 2001, as Econet Wireless Nigeria, the telco has undergone what some industry watchers described as ‘transfiguration’.

The first was its entrance as Econet Nigeria, which lasted for about three years. Then came the South African mobile operator, Vodacom and in less than two months after, it metamorphosed into Vmobile, courtesy Econet Wireless International (EWI) subsequent court action.

EWI, which has gained reputation for court injunctions on the continent with its partners, was reportedly undeterred as it returned to a Lagos Court penultimate Tuesday, for an injunction over Vmobile/Celtel deal, of which the 30 days set aside for conclusion of the deal expired the same day.

Now is another transfiguration with the coming of Celtel (Nigeria).

Watchful Nigerians

In the watchful eyes of Nigerians, Vmobile is not far from the biblical transfiguration as its marriages turned out to be an expose for its desire to be counted among leading continental and global GSM networks.

As elucidated by one of its directors, Chief Henry Imasekha, if Vmobile has the best of plans for its customers without adequate funding to execute same it would become meaningless. This, he said, is why Celtel acquisition is most welcome.

However, Vmobile on August 5, 2001 began commercial operation which it claimed was the first by any of the GSM licensees in the country. Currently savouring its over 5.3 million active subscribers with coverage in over 600 towns and 8000 communities across the six geopolitical zones, Vmobile is pursuing hitherto promise of aggressive network roll out as well as quality and service upgrades in order to provide what the Public Relations Manager, Mr. Emeka Oparah, would call “world-class customer services that would make telecommunications an enjoyable experience for all Nigerians.”

Celtel abandons NITEL

The take over of the 65 per cent stake in Vmobile by Celtel, has forced the telco to discontinue its prior intention to buy over the national operator, the Nigerian Telecommunications Limited (NITEL).

ITRealms Online recalls that mid-April Celtel International, entered into a ‘Conditional Acquisition’ with Vmobile for a total consideration of US$1.005 billion.

Also, Celtel was listed among five telcos scheduled to bid for NITEL this year, but has now dropped the idea. Noteworthy is that last year, Celtel on learning that the Mobile Telecommunications Limited (MTel), the GSM arm of NITEL was excised from the original NITEL offer withdrew its bid.

The Chief Strategy and Development Officer at Celtel, Ms Tsega Gebreyes, confirmed that the telco would forgo the NITEL dream. “We would not pursue NITEL anymore given that we have completed acquisition today,” she affirmed.

Expressing delight on the completion of the Vmobile deal, she said, that negotiations with Nigerian shareholders have resulted in the much needed investment in the company.

“Celtel looks forward to a strong partnership with Vmobile shareholders to build an even stronger business,” Ms Gebreyes said.

How it was sealed

Announcing the formal completion, a director in Vmobile and Senior Advocate of Nigeria (SAN), Mr. Paul Usoro, said Celtel acquired 65 per cent of Vmobile after a successful transaction. According to him, this follows the expiration of the mandatory 30-day period to enable EWI exercise the right of ‘first refusal’ or buy over the shares on offer.

As said by him, at the end of the board meeting penultimate Friday, the remaining 65 per cent of Vmobile’s shares were transferred to Celtel International.

“We are delighted to have found a partner that shares both our vision and our passion for developing the mobile telephony market in Nigeria,” he declared.

Mr. Usoro stressed that the transaction would assist Vmobile to continue its expansion plans to ensure that the company offers Nigerians the highest quality infrastructure and world class service that they deserve.

Mr. Usoro also informed that the initial $1.005 billion has been structured as the purchase of existing shares and equity injection which will immediately boost Vmobile’s financial ability to continue and accelerate its aggressive roll out.

Fate of 2000 staff

Leading the Celtel team at the transaction, the chief executive, Celtel International, Mr. Marten Pieters, assured that of the over 2000 employees of Vmobile, the intelligent ones would be retained, just as he noted that there is no vacancy for the chief executive for now as Mr. Willem Swart would continue in that instance.

He also said that out of the 12 directors in the new Celtel Nigeria, five would be Nigerians, another five Africans and the remaining two non-Africans.

“I am very proud to say that all we have achieved was part of team work,” he said, even as he expects their Nigerian colleagues in erstwhile Vmobile to integrate into Celtel soonest.

Before now, Celtel has presence in Burkina Faso, Chad, Congo Democratic Republic, Congo, Gabon, Kenya, Madagascar, Malawi, Niger, Sierra Leone, Sudan, Tanzania, Uganda, and Zambia, with over 10 million subscribers, which has now grown to 15.3 million in 15 African nations.


One remarkable thing imminent is the change of the brand to what Mr. Pieters said is Celtel model of brand which has kept the company competitive over the years.

On May 2005, a similar transaction was sealed between Celtel and MTC Group following the acquisition of 85 per cent shares of the telco by MTC.

According to the telco, its brand is actually a critical factor differentiator from competitors. And a key in the line-up of things to expect from Celtel Nigeria, eventually, including rebranding of Vmobile and relevant integration.

This would see Nigerians enjoying the likes of prepaid roaming services without topping up the domestic account, virtual airtime, Me2U which enables sharing or transferring of airtime among subscribers.

Whilst waiting for completion of the rebranding and reintegration of the Vmobile into the full Celtel Group, one message is clear, that is, the coast of competition is getting keener and those who want to play in this market must wake up especially now that we have unified licensing waiting for grabs.

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