NCC’s masterstroke that saved 2000 jobs

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There is hardly any doubt that the timely intervention of Nigeria’s telecom regulator, the Nigerian Communications Commission (NCC), doused tension and averted the ugly economic situation that would have resulted from forceful take-over of Etisalat Nigeria by a consortium of 13 banks.

Etisalat was under threat of imminent forceful takeover by a consortium of 13 banks over its inability to repay a $1.2bn medium term loan obtained four years back for modernisation and expansion of its network, until the NCC stepped into the crisis to stave off any hostile takeover.

Analysts say the regulator intervened in time to save the jobs of over 2000 direct employees of the country’s fourth largest network operator, amid mounting anxiety resulting from the struggle between the banks and Etisalat, which over the years has accumulated over 21 million subscribers and well over 13 percent market share.

Some industry experts say the move by the regulator immediately calmed the storm and averted what would have been a major setback in the gains made in the nation’s telecoms industry in the last few years.

In April 2013, Etisalat announced plans to invest over $500 million to expand its network, enabling further potential market growth of 17 per cent and went ahead to obtain a medium term loan of $1.2bn from banks, which it used to refinance an existing $650 million loan and funded a network expansion.

However, since 2016, the consortium of banks had been having a running battle with the mobile telephone operator over repayment of the loan facility resulting in a breakdown of negotiation, which threatened to disrupt critical gains made in Nigeria’s telecoms sector in many years.

The furore got to the extent that Etisalat’s two foreign investors, Emirates Telecommunications Service and Mubadala withdrew their interest in the concern, compounding the problems of EMTS, which is trading as Etisalat Nigeria.

Apprehensions heightened among stakeholders who feared that the development might lead to massive job losses in the sector until NCC was able to bring the situation under control through tactful negotiations and compromise.
The Executive Vice Chairman and Chief Executive of NCC, Professor Umar GarbaDanbatta declared that the regulator had to step in to safeguard the interest of investors, staff and subscribers all of whom stood to lose if the situation was allowed to deteriorate.

NCC had outlined several “prescriptions” to ensure peaceful resolution of the matter, insisting that the consortium of banks seeking to takeover Etisalat Nigeria must first cross some regulatory hurdles, a move commentators described as the master-stroke which brought calm to the already tension-soken sector and indeed the economy.

Danbatta noted that the over $2billion foreign direct investment (FDI) by Mubadala of United Arab Emirate (UAE) was hanging while 20 million subscribers and over 2000 workers would have been affected if the NCC did not intervene in the matter with a view to finding an amicable resolution.

Resolving the issue was also partly to forestall any form of disincentive to the FDI, Danbatta explained.
According to him, if the company had gone under, this would have created a social problem especially with the job of over 2000 Nigerians on the line, a development that is capable of creating security challenges for the country.

To do what it did, the NCC collaborated actively with the CBN to avert what was obviously a looming economic disaster. It was elating for everyone when that collaboration resulted in a situation where Danbatta was to happily declare that all that they at the NCC wanted was “to see a viable and thriving 9Mobile and we want to cooperate with you so that things can move seamlessly and successfully.”

Indeed, all is well that ends well. But, getting the negotiation back on track and saving 2000 direct jobs and millions of indirect ones, wasn’t an easy street for the nation’s telecoms regulator. When the going was tough, the NCC’s Director of Public Affairs, Mr. Tony Ojobo drew the attention of the lender banks to Section 38,Sub-section 1 of the NCA which states that “the grant of a license shall be personal to the licensee and the licensee shall not be operated by, assigned, sub-licensed or transferred to another party unless the prior written approval of the commission has been granted.”

What that means, Ojobo further clarified, was that the lender banks must take note of relevant provisions of the NCA 2003 as well as relevant provisions of the laws guiding the transfer of licences issued operators by the telecoms regulator.

Sub Section 2 of the same provision equally states that “a licensee shall at all times comply by the terms and condition of the license and the provision of this act and its subsidiary legislation.”
Using the provisions of the law as basis for further discussion between the ‘warring’ parties, NCC and CBN “mediated by holding several meetings with the banks, Etisalat and other stakeholders with a view to finding a resolution.”

And find a solution they did. CBN’s spokesperson Mr. Isaac Okorafor explained that the CBN and Nigerian Communications Commission (NCC) had suspected that banks might go ahead in the usual way and downsize the company’s over 4,000 staff, adding that ‘this was why the two regulator bodies reached an agreement to intervene’.
Okorafor said: “Although it should ordinarily not be the role of a regulator to decide how individual bad loans are resolved, the CBN believes that Etisalat is a systemically important telecommunications company with over 20 million subscribers that if not well handled, may have negative implications for the banking system itself.”

Access Bank Plc and other Nigerian banks eventually took over the management of the company, effective June 15 following the protracted $1.2 billion debt impasse. Other lenders in the loan deal are Zenith Bank, GTBank, First Bank, UBA, Fidelity Bank, Ecobank, FCMB, Stanbic IBTC Bank and Union Bank and some foreign banks.

However, intervention by the NCC andthe CBNwas all it took to avert a hostile takeover that would have had deleterious consequences on the bourgeoning telecom sector, and stakeholders are happy that today, Etisalat Nigeria is now trading under the brand name, 9Mobile without any job losses.

To be sure, the decision to intervene is one that everyone involved in the deal is certainly proud of, especially because it was quite timely. is a Also, the Vice President , Government and Regulatory Affairs of 9Mobile, Ibrahim Dikko described NCC’s intervention as timely, stressing that the regulator was able to deliver a master stroke that calmed the whole tensions and saved the economy from some undesirable pressure.

“NCC was categorical when they said the license was not transferable so it was a brilliant master stroke from them. They spelt out what the Act stated, because many people did not understand that telecom sector is a technical sector and not a business where anybody could just step in and say I am taking over irrespective of what has happened. They were able to calm the storm,” surmised Ibrahim Dikko, Vice President, Government and Regulatory Affairs of 9Mobile.
CHIDI UGWU is an Abuja-based Correspondent of The Oracle Today

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