Globacom Positions As Nigeria’s Largest Telecoms Operator


Nigeria’s $70 billion telecommunications industry is set to witness a major acquisition on or before December 31.

This follows the bidding process that would eventually provide a fresh investor for 9mobile, formerly Etisalat.

9mobile is being sold after regulators saved the company from collapse when both an investment fund and Etisalat exited the country in June, following the default of a $1.2billion loan.

From about 10 initial bidders competing for the soul of 9mobile, the Financial Adviser, Barclays Africa, a South African firm, has been able to prune down to five. These five include, Bharti Airtel, Globacom, Helios, Smile Communications and Teleology Holdings Limited.

Checks have also revealed a possible alignment among the competing firms. Reports say four of the bidders have formed alliance to reduce the chances of the remaining one which appeared to have the financial muscle to crush the other bidders ahead of the deadline.

Accordingly, the architects of the alliance bid intend to pool resources that brings to the table an unbeatable offer that will guarantee that they secured control of 9mobile. Although, it is uncertain if they will create a Joint Venture (JV) vehicle to advance their plan to gain ownership of 9mobile.

Globacom, according to industry trend is seriously looking for every means to depose MTN and become the largest operator in Nigeria.

Market analysts believe that the battle for the soul of 9mobile rests strictly between Globacom and Airtel because of their financial muscles and experiences in the Nigerian market. Should either be successful in the bid, the additional connections would see it overtake MTN as market leader.

Globacom is second after MTN, and controls 26.6 per cent market share and 37 million customers, where Airtel is third with 35 million customers as at the end of October.

Embattled 9mobile has 17 million customers, which is 12.2 per cent of the market. MTN with 50.7 million customers controls 36 per cent market share.

Prior to the quest for the soul of 9mobile, industry analysts say in view of its position in the market, 9mobile may not be very attractive to international buyers when considered against the $1.2billion syndicated loan default which is now a liability that must be factored in any acquisition bid.

They believe that aside the liabilities, it would be easier for an existing player in the industry wishing to raise its bar of market share to buy up the company and sharply rise to become a strong competitor.

Against this backdrop, leading national carrier, Globacom, is considered a better match if it truly desires to lead the Nigerian market.

They submitted that if Glo mustered the courage to take the bull by the horn and acquire 9mobile, the narrative on the industry lead will change immediately.

This is so, because, when Glo adds up its 26.6 per cent to 9mobile’s 12.2 per cent, it will rise to 38.8 per cent and tactically dethrone MTN, which is currently at 36 per cent.

Market analysts believe that Glo will make better advantage of 9mobile investment, should it prevail over other bidders, because among other things, the telecommunications firm is poised to bring in the Wireless Broadband revolution faster and to a larger cross-section of the Nigerian population. Already, it has a 4G network covering the major cities in 700 Mhz band unlike any other operator in Nigeria. This will also complement what it will meet at 9mobile, which also in October launched its 4G services.

Besides, Globacom, which started operation in August 2003, is the Second National Career licence holder, which enables it to have fixed line, broadband, mobile telecommunication platforms. Glo’s operation is boosted by its submarine cable from Europe, which is laid across the length and breadth of Nigeria.

Accordingly, Globacom is the only operator, which owns infrastructure including towers, generators, MSC and datacentre buildings.

A telecom commentator, Junaid Abdul, noted that Glo is built on the bedrock of sound financial strength to guarantee the continuation of telecom services in Nigeria, saying the Mike Adenuga Jr owned telecommunications firm has a robust Fibre network with huge capacity spreading across the whole land mass of Nigeria, connecting all major towns to carry the traffic.