New Generations Telecom wins NITEL bid; MTN clinches SAT-3

Nitel HQ 2A shocking $2.5 billion bid by New Generations Telecommunications Consortium (formerly Telefonica) threw competitors off balance to clinch the preferred bidder slot at the financial bid opening for the acquisition of 75 percent of the moribund national telecom carrier, Nigeria Telecommunication Ltd and its mobile arm, MTel.

New Generations Telecommunications Consortium has GiCell Wireless Limited (a nNigerian company), China Unicom (Hong Kong) Limited, and Minerva Group as members.

With this development, the preferred bidder now has to pay $750 million within 10 days from the date of National Council on Privatization NCP approval while the balance is expected within 60 calendar days of the council’s approval.

MTN Nigeria also emerged the sole bidder for SAT-3 with an offer of $25 million, though its offer is still subject to the confirmation of the National Council on Privatisation (NCP) subject to meeting the reserve value for the bids.

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8 comments

  1. Something just doesnt feel right about this sale. New generation telecoms? who are they? Googling them doesnt give much and how can they be ‘former Telefonica’ when Telefonica still exists in Europe and just acquired a German telecoms coy? By the way 2.5 billion dollars sounds too good to be true or was that a typo? Okay I was wrong earlier, not just something but a few things dont seem right about this new attempt to sell NITEL. Hopefully the next few days should be revealing.

  2. I watched the last round of the bidding live on NTA yesterday and it amazed me that the difference between the winner’s bid and that of the first runner-up was $1.5b. NCP must be smiling to the bank.
    Like everyone wished, I hope this sale goes well unlike previous attempts.

  3. So MTN eventually got SAT-3…..well am happy because this will translate to increased competition in the marine fibre optics cable sub sector of the telecommunication industry. What this means is that pretty soon we are gonna be having 3 sub marine cable operators(Main One, Glo-1, Sat-3) battling for subscribers’ pockets.
    I dont see Nitel making a significant impact in the phone(wired, fixed, wireless, mobile) segment of the market. We are waiting with bated breathes to see the innovations and strategies they are bringing to us.

  4. While we do not have detailed info on the relationship between Telefonica and New Generation, here is the picture as it appears to us:

    1. what is the New Generation consortium was originally called the Telefonica consortium (and was likely spearheaded by Telefonica)

    2. in all probability, Telefonica pulled out (and was replaced by another firm) and so the name of the consortium was changed

    We are sure about the name change; the consortium was originally called Telefonica Consortium. The rest are our speculations just looking at the picture, as almost no news media house has given any details on this subject

  5. Been thinking about this sale and is it just me? the deference between the winning bid and the runner is so big ($1.5 billion) I strongly suspect the financial backers of these guys will be asking hard questions to be sure they are not throwing money down a hole. Imagine the huge investments needed to pull Nitel, or whatever is left of it, out of the woods. Forget that government is taking over the liabilities, what of the negative brand value, almost no staff on ground, obsolete equipment, dead and gone technology…. the list goes on.

    I am trying hard not to be sound pessimistic; I will be surprised if these guys don’t ask for a moratorium, extension, renegotiation or whatever in the course of the coming weeks and I will be the first to jump for joy if they do pay up. If they can hold the consortium together maybe the Chinese may back them up.

    What does MTN want with the SAT 3 when they are major stakeholders in the up coming WASC cable. I think $25m is paltry offer for the SAT 3 cable. With this bid how will resalers like Suburban Telecoms survive with a major customer ditching them?

    The next few weeks should be very very interesting indeed. I just hope this latest attempt wouldn’t come down like a pack of cards again.

  6. From ThisDay:

    In a curious twist, China Unicom (Hong Kong) Ltd, previously named a member of the New Generation Consortium that emerged the preferred bidder for 75 per cent stake in moribund Nigerian Telecommuni-cations Limited (NITEL) with a $2.5bn bid, has denied knowledge of the deal.

    A report in Financial Times said China Unicom dissociated itself from the bid for NITEL announced by the Bureau of Public Enterprises (BPE) on Tuesday.

    Also, Deputy General Manager Corporate Commun-ications of the company, Dr. Sophia Tso, in an email enquiry from THISDAY claimed ignorance of the deal.

    What next?

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