It seems to be a never-ending journey of turmoil for 9mobile, even after the telecommunications company has gone ahead to edge out Teleology Holdings Limited which may have prompted the company to sue the Nigerian business arm that has continued operations.
9mobile’s troubles began when it defaulted in the servicing of a syndicated loan of $1.2 billion owed a consortium of 13 Nigerian banks.
In the aftermath, its erstwhile technical partners, Etisalat, exited the business and requested that the use of the “Etisalat” brand name by the company be discontinued immediately.
In order to save the company from a foreclosure together with its implications on job loss and possibly the stability of the larger telecoms industry, the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) intervened to safeguard shareholders, staff and subscribers of the network.
Initially, 16 firms showed interests in acquiring 9mobile, but after a long, arduous process, Teleology emerged as the preferred bidder for its technical and financial capacity to transform 9mobile.
During the acquisition process, Teleology Holdings, through its Nigerian subsidiary, Teleology Nigeria Limited, was able to secure a short-term loan of $251 million from Afreximbank, with an understanding that it would raise the money through shareholders and long-term lenders, which will be paid back in full by January of this year.
Unfortunately, the chapter that followed was an anti-climax, with Teleology Holding’s announcement of its intent to withdraw from further participation in the 9mobile project in early January 2019, due to what it called “increasing discomfort with actions taken outside the agreed business plan since the November 12, 2018 formal takeover of 9mobile”.
Teleology Holdings Ltd also sought to exit its shareholding in the local joint venture Teleology Nigeria Limited, which will be required to change its name.
After Teleology Holdings pulled out of the 9mobile deal, Teleology Nigeria Limited renegotiated the loan repayment and got a reprieve that allowed it to pay $50 million by January. However, BusinessDay finds that the renegotiated terms have not been met.
Sources close to Afreximbank have hinted that the bank will embark on an aggressive loan recovery drive in the coming weeks, despite the fact that 9mobile officials have given assurances that the firm may get a lifeline soon.
BusinessDay sources familiar with the dealings have revealed that Teleology Holdings Limited may in the coming weeks institute a civil action against 9mobile.
“Teleology is reportedly aggrieved over the shoddy manner its planned acquisition of 9mobile was handled following reports of document falsification and forgery by its Nigerian partners during the process leading to the acquisition,” a source said.
“It is true that Teleology Holdings Limited is thinking of going to court and they have every right to do so, but 9mobile is also looking to reach amicable ends with Adrian Wood, who is the founder of the company. It is in the interest of the industry that they look at all possible options to try and settle amicably out of court,” Olusola Teniola, president, Association of Telecommunications Companies of Nigeria (ATCON), told BusinessDay.
Recall that the NCC in December 2018 gave disconnection approval to mobile network operators (MNOs) to disconnect their debtors over continued rise in interconnect debt and failure of the affected operators to pay the huge interconnection fees owed.
A 21-day window was given by the NCC to the companies to make amends or risk disconnections and IHS is up in arms, seeking ways to compel the telco to pay monies owed it.
Meanwhile, the effects of these troubles are beginning to come to light as employees of 9mobile have gone into panic mode and are leaving the company in droves, particularly the management staff, as there seem to be no quick resolutions to the company’s many problems.
Already, five managers and one director for regional sales, Victor Nwokobia, are said to have abruptly resigned last week.
While speaking on the approval given by NCC to MNOs to disconnect debtors, an official of the Association of Licensed Telecommunications Company (ALTON) said the matter of interconnect indebtedness amongst Nigeria’s telecoms operators was a complex one and that it would be difficult for any service provider to disconnect indebted companies. In the first place, the aggrieved parties who are making claims and counter-claims on the level of indebtedness are unwilling to come forward for the resolution of interconnect disputes among them. It was gathered that a recent meeting called by the NCC to discuss the matter was rebuffed by all parties involved.
“These are certainly not good times for 9mobile as their troubles are mounting on all angles. There are so many questions that need to be answered. 9mobile stakeholders and subscribers need to know what is happening with their network,” Hannah Odusanmi, a telecoms industry analyst, said.
The question industry watchers are asking now is when 9mobile will get the expected lifeline in order to escape its current quagmire. Will there ever be respite for 9mobile so that it does not collapse under so much pressure?
Sadly, if it does, the implications on the industry will be huge. For one, will other telecoms networks have the capacity to absorb the 15 million 9mobile subscribers who will suddenly find themselves without a network provider or is there a small window still open for renegotiation with Teleology Holdings? Only time will tell.
BusinessDay reached out to Oluseyi Osunsedo, director, regulatory and corporate affairs, 9mobile, through a phone call and email, to find out negotiation terms between 9mobile and Teleology Holdings Limited. At the time of filing this report, however, there was no response from the company’s spokesperson.
Jumoke Akiyode-Lawanson
