Etisalat Nigeria given three weeks to phase out brand identity

Etisalat has been given three weeks to phase out its brand in Nigeria, after its Abu Dhabi arm recently pulled out and new board members were appointed to run the affairs the company, following failed negotiations with its lenders over a missed payment of the $1.2billion loan taken out in 2013.

According to reports on Reuters; the intervention of the Central Bank of Nigeria (CBN) and Nigerian Communications Commission (NCC) to save Etisalat Nigeria from collapse after talks with lenders had failed, hence, Abu Dhabi’s Etisalat has terminated its management agreement with its Nigerian arm and given the business time to phase out the brand in Nigeria.

Hatem Dowidar, Chief Executive Officer, Etisalat International, said in an interview that; “Etisalat Nigeria was to provide technical support, adding that it can use the brand for another three-weeks before phasing it out.”

Industry watchers say there have been a few interests shown by companies willing to buy out Etisalat. However, no concrete decisions were made, as discussions between Etisalat, the consortium of 13 Nigerian banks and the regulators, were still ongoing at the time.

With a given ultimatum of three weeks to completely phase out its brand, experts say it is very likely that the lenders have already found a buyer to take over Etisalat, as in the case of Econet Wireless Nigeria, which was bought over by Vodacom and in turn sold to CELTEL before changing identity and management to Zain and finally Airtel Nigeria.

“We suspect that Dangote might buy Etisalat Nigeria and take over, because the company has always been interested in telecommunications, considering that the current 3G license that Etisalat uses for operation was sold to them by Dangote,” An inside source told BusinessDay.

In a statement made available to BusinessDay, the NCC said it was taking proactive steps to cushion the impact of the takeover.

Stating the Nigerian Communications Act (NCA) 2003 Section 38: Sub section 1 and 2, the commission said; “The grant of a license shall be personal to the licensee and the license shall not be operated by, assigned, sub licensed or transferred to another party, unless the prior written approval of the commission has been granted and that a licensee shall at all times comply by the terms and conditions of the license and the provision of this act and its subsidiary legislation.

Asked if the Commission has transferred Etisalat’s license to a new company to re-brand and takeover operations, Tony Ojobo, Director, Public Affairs, NCC, told BusinessDay that; “As the telecoms industry regulator, we cannot comment based on speculations. If Etisalat Nigeria has been told to phase out its brand, then the company must write to NCC officially and so far, we have not received any information from Etisalat regarding this, so as far as we are concerned, it is a rumor for now.”

Experts say it would probably take much more than three weeks for the company to totally phase out its existing brand, as no concrete decisions have been made on transfer of ownership and rebranding.

On the issue of eliminating Etisalat from Nigeria’s telecommunications industry, Gbenga Adebayo, Chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON) said; “We do hope that the brand issue would be resolved without any impact on the subscribers and as part of the overall resolution of all issues affecting our member (Etisalat).”

Etisalat has been engaging in talks with 13 Nigerian banks, the CBN and NCC, to reach an agreement on possible repayment plans for a $1.2billion medium term syndicated loan facility taken in May 2013, hoping to be able to refinance the existing commercial medium term debt of $650 million.

The company said it was unable to pay back the loans as at when due, as a result of the weak naira and Foreign Exchange scarcity in the country.

Since the company missed its February 2017 payment and efforts to restructure loans have failed, Etisalat Group has terminated a management agreement with its Nigerian arm, and given the business time to phase out the Etisalat brand in Nigeria, following its appointment of a new management board to run operations.

 

Jumoke Akiyode