- Fresh Hurdles for 9mobile
The last few months, if you will, have been very eventful for Emerging Markets Telecommunication Services Limited (EMTS) which previously traded as ‘Etisalat Nigeria.’ The company passed through the mill in its quest to literally rescue its drowning baby from the murky waters!
Yes, Etisalat Nigeria passed through some kind of evil days and almost fated but for the quick intervention of the Central Bank of Nigeria.
A horse of recall
Etisalat Nigeria had in 2013, obtained a seven-year loan facility of $1.2billion from 13 local banks and their foreign counterparts to refinance a $650 million loan as well as the expansion of its network but the company had missed the payment due to a dollar shortfall in Nigeria’s financial system.
The loan, which involved a foreign-backed guaranty bond, was for Etisalat to finance a major network rehabilitation and expansion of its operational base in Nigeria.
The 13 local banks involved in the loan deal include: Zenith Bank, GT Bank, First Bank, UBA, Fidelity Bank, Access Bank, Ecobank, FCMB, Stanbic IBTC Bank, Union Bank.
Subsequently, Abu Dhabi state investment fund Mubadala, the second-largest shareholder in the business, had in April presented a final restructuring plan to the banks which they flatly rejected. The banks further gave a one month window for repayment which lapsed in May 31st, 2017.
But following its inability to redeem its payment, the banks issued Etisalat a default notice and sought to take over the company before the Central Bank of Nigeria now intervened.
A comeback bid
But like the proverbial phoenix, it does appear that the fourth largest network is literally trying to get back its life on an even keel what with its new name and brand essence.
At the end of a crucial management meeting of the telecom firm in Lagos, penultimate Thursday, it rallied to move away from the shadows of its troubles by taking a new brand name.
9mobile was unanimously adopted by the company as its new brand name, a move that may have been preempted by the chief executive of Etisalat International, Hatem Dowidar who said Etisalat Group would, in the next three weeks, phase out the brand name in Nigeria.
The decision followed Emirates Telecommunications Group (Etisalat Group) withdrawal of further involvement in the ownership of the Nigerian subsidiary.
Until June 15, the United Arab Emirates, UAE, group was a major shareholder in Etisalat Nigeria, along with United Arab Emirates Sovereign Wealth Fund through Mubadala Development Company, Abu Dhabi.
The two affiliates controlled a combined 85 per cent equity in the telecom firm, with Myacinth holding 15 per cent stake through Emerging Markets Telecommunications Services, EMTS Holding BV, owned by former United Bank for Africa, UBA, Chairman, Hakeem Bello-Osagie.
Opting to part ways with the company followed the crisis in the wake of the $1.2 billion (N377.4 billion) syndicated loan the telecom firm took in 2013 from a consortium of 13 Nigerian banks.
Etisalat Nigeria, Emirates Group disclosed in a filing with the Abu Dhabi Securities Exchange it had transferred 100 per cent of its shares with EMTS Holding BV, a special purpose vehicle established in Netherlands, to United Capital Trustees Limited, legal trustees of the banks.
However, following the resignation a fortnight ago of its immediate past Chairman, Mr. Bello-Osagie, and last week’s reconstitution of the company’s Board of directors, the issue of the trading name the embattled firm would carry brought fresh headache to its management.
EMTS Vice President Regulatory and Corporate Affairs, Ibrahim Dikko, had weighed in with an explanation that the company had a valid and subsisting agreement with its former parent company, to continue using the Etisalat brand regardless of the recent restructuring of the Company.
Mr. Dikko gave a hint as to what the new name of the company could be. He recalled that at the launch of EMTS in Nigeria in 2008, “0809ja” was adopted, to affirm the “Nigerianness” of its origin and the company’s sphere of influence.
Following Thursday’s announcement of the new brand name, our correspondent learnt that all staff of the company nationwide were sent notices of the change of name.
Expectedly, on Wednesday the company officially unveiled its new brand identity, 9mobile, with a new logo and website.
The event which was shorn of the usual razzmatazz at such occasion had top members of staff in attendance.
The Chief Executive Officer of 9mobile, Mr Boye Olusanya who addressed reporters at the news conference in Lagos, said with the migration to a new name and brand, 9mobile promised to sustain and continuously provide innovative and value-adding propositions, which it had delivered since inception nine years ago.
He said the new brand identity reflected the bold and creative attributes which the company shared with its valued subscribers.
According to him, the rebranding will enable the company to connect more with its subscribers, especially the youth.
“In our nine years of operations, we have remained at the forefront of innovation and take pride in consistently delivering superior experiences to our subscribers.
“We continue to establish meaningful partnerships with our customers and partners by providing platforms that support their goals and aspirations,’’ he said.
The CEO said that the new name and brand were a deliberate representation and confirmation of its Nigerian heritage.
He said that the new identity was another phase of the telecommunications company’s evolution over nine years of operations in Nigeria.
Olusanya said that though the company’s name and brand changed, the values on which it operated remained the same.
He said that the new logo represented resilience and continuity, particularly of digital technology and continued impact on communication and human interactions.
According to him, being a number-themed logo reflects the network’s futuristic slant.
“With the launch of our new brand, our commitment to providing our subscribers with best-in-class telecommunications services continues. We live in a digitalised world and 9mobile is positioned to deliver more platforms, products and services, using the power of technology.”
Olusanya said that over the years, the telecommunications company had built a strong network, which better-positioned 9mobile to continue delivering innovative solutions.
He said that the values of innovation, customer-centricity and quality of service remained its guiding principles, even as the new management focused on driving efficiency and steering growth.
The CEO while acknowledging that the task to get the changes under way was no doubt easy, however attributed the seamlessness of the task to the responsiveness of its staff, who according to him made the difference.
The tasks ahead
It is however instructive to note that the telco still faces a number of challenges ahead, which may make or mar its growth plans if not addressed headlong.
Speaking with a cross-section of industry experts they told our correspondent that the telecoms network needs to step up its game in its quest to remain relevant in the sector.
Speaking in an interview, Mr. Olusola Teniola, National President, Association of Telecommunications Companies of Nigeria (ATCON) said, “Full rebranding of Etisalat over the period under new management can be from $100m and above. However, if 9mobile is viewed as a temporary brand name that is in transition awaiting another buyer, then in my estimates, a figure much lower than $100m can be used to rebrand 9mobile over all its customer care centers and kiosks, stationary, bill boards and a very light touch of below the line awareness that doesn’t include SIM card / recharge card rebranding.”
The ATCON boss was also quick to add that the potential in the industry is enormous and any new investor has the opportunity to define and shape the future of this dynamic industry.
Echoing similar sentiment, the Managing Director/CEO Prima Garnet Africa, Laolu Akinwunmi who acknowledged the fact that the cost of rebranding the network could not be summed up without proper due diligence analysis, said depending on the scope and breadth, a rebranding exercise will not come really cheap.
Akinwunmi who is also former Chairman Advertising Practitioners Council of Nigeria (APCON) however admitted that the cost of rebranding will be in the region of several millions of dollars.
Besides funding, The Nation gathered that the company may also faced the arduous task of maintaining its steady subscribers on its network as existing and prospective subscribers are pulling out.
At the last count, the number of subscribers that have abandoned the network, following the crisis it had as a result of its inability to repay a $1.2 billion loan facility it obtained from a consortium of banks, has increased to over 3.5 million.
It was gathered that the event on the new brand unveiling, held at its Lagos headquarters, was a departure from the flamboyant nature with which the telco was known when having similar major events in the past nine years of its operations in Nigeria.
From over 22 million subscribers in the past months, Etisalat subscribers has crashed to 18.5 million, this represents a loss of over 15 per cent of its total active subscribers as at May, this year, data obtained from the Nigerian Communications Commission (NCC) revealed.
Also, 9mobile’s (as Etisalat Nigeria is now known) market share, which had reached 15 per cent dropped to 12.76 per cent, at the end of May.
MTN currently has 54.9 million subscribers; Globacom, 37.3 million while Airtel has 34.1 million with their market shares standing at 37.8 per cent, 25.7 per cent and 23.5 per cent respectively.
Already, Chief Executive Officer, 9mobile, Mr. Boye Olusanya, has confirmed the poor financial state of the telecoms company, little wonder he said, the telco ‘is still open for investors’ in order to put the company fully back on track, even as he disclosed that the company is now positioned to offer more value to subscribers still remaining on its network while working to attract new customers.
With the migration to a new name and brand, Olusanya said 9mobile was seeking to sustain and continuously provide innovative and value-adding propositions which it has delivered since inception nine years ago.
On the growing fears over job security, Akinwunmi said this may not be much of a problem. The new management, he noted, “Is very solid and as you can see from their prompt response to the name change, also competent. However, at the end of the day, the decision on what to do with jobs is with the board and senior management.”
While commenting on the public acceptability, he said this will be a function of many factors. “It will be at different levels. Quality of services is one. If the customers continue to enjoy the same quality of call services, VAS etc there will be no problems I am sure the public will accept the new brand.”
Lending credence to Akinwunmi’s point, Teniola while noting that the customer is king in this industry and the segment of the market that spoke to Etisalat’s success would and should be the area that 9mobile should hold dear to its strategic intent. “It is our view in ATCON that all our members adhere to a Business Code of Ethics that treats the consumer in a proper manner and if EMTS rebranded as 9mobile adheres to these sets of principles we believe public acceptance will continue to exist.”
In the view of Teniola, “Once the new management is able to return the underlying operations of EMTS to a profitable position that allows its financial performance to cover its full current obligations to its creditors, especially in the form of ‘interest rate coverage’ then the issue of job losses may be kept to a minimum.”
On addressing investor apathy, Teniola said it could be addressed if the new crop of management plays by the rules. “The CEO of 9mobile has stated that the company is open to willing investors. This statement demonstrates that the lenders controlling the company are willing to enter into discussions with new investors willing to turnaround this promising company. The potential in the industry is enormous and any new investor has the opportunity to define and shape the future of this dynamic industry. A lot of innovative solutions are waiting to be introduced to totally transform the way the existing value chain has been created to address the voice market and needs to be changed to truly address the digital realm.”
In his own assertion, Oluwadare Ogunyombo, a marketing communication expert also holds the view and very strongly that the telco needs to gird up its loins so as to turn the tide. This, he said, becomes inevitable if the idea is to remain relevant. Pray, is someone listening?
Egbin Decries N388B NBET Debt, Idle Capacity
Egbin Power Plc, the biggest power station in Nigeria, has said it is owed N388bn by the Nigerian Bulk Electricity Trading Plc for electricity generated and fed into the national grid.
The company disclosed this on Tuesday during an oversight visit by the Senate Committee on Privatisation, led by its Chairman, Senator Theodore Orji, to the power station, located in Ikorodu, Lagos.
The government-owned NBET buys electricity in bulk from generation companies through Power Purchase Agreements and sells it to the distribution companies, which then supply it to the consumers.
The Group Managing Director, Sahara Power Group, Mr. Kola Adesina, told the lawmakers that the total amount owed to Egbin by NBET included money for actual energy wheeled out, interest for late payments and available capacity payments.
Egbin is one of the operating entities of Sahara Power Group, which is an affiliate of Sahara Group. The plant has an installed capacity of 1,320MW consisting of six turbines of 220 megawatts each.
The company said from 2020 till date, the plant had been unable to utilize 175MW of its available capacity due to gas and transmission constraints.
Adesina said, “At the time when we took over this asset, we were generating averagely 400MW of electricity; today, we are averaging about 800MW. At a point in time, we went as high as 1,100MW. Invariably, this is an asset of strategic importance to Nigeria.
“The plant needs to be nurtured and maintained. If you don’t give this plant gas, there won’t be electricity. Gas is not within our control.
“Our availability is limited to the regularity of gas that we receive. The more irregular the gas supply, the less likely there will be electricity.”
He noted that if the power generated at the station was not evacuated by the Transmission Company of Nigeria, it would be useless.
Adesina said, “Unfortunately, as of today, technology has not allowed the power of this size to be stored; so, we can’t keep it anywhere.
“So, invariably, we will have to switch off the plant, and when we switch off the plant, we have to pay our workers irrespective of whether there is gas or transmission.
“Sadly, the plant is aging. So, this plant requires more nurturing and maintenance for it to remain readily available for Nigerians.
“Now, where you have exchange rate move from N157/$1 during acquisition in 2013 to N502-N505/$1 in 2021, and the revenue profile is not in any way commensurate to that significant change, then we have a very serious problem.”
He said at the meeting of the Association of Power Generation Companies on Monday, members raised concern about the debts owed to them.
He added, “All the owners were there, and the concern that was expressed was that this money that is being owed, when are we going to get paid?
“The longer it takes us to be paid, the more detrimental to the health and wellbeing our machines and more importantly, to our staff.”
Adesina lamented that the country’s power generation had been hovering around 4,000MW in recent years.
Oil Rises on U.S. Fuel Drawdowns Despite Surging Coronavirus Cases
Oil prices climbed on Wednesday after industry data showed U.S. crude and product inventories fell more sharply than expected last week, reinforcing expectations that demand will outstrip supply growth even amid a surge in Covid-19 cases.
U.S. West Texas Intermediate (WTI) crude futures rose 48 cents, or 0.7%, to $72.13 a barrel, reversing Tuesday’s 0.4% decline.
Brent crude futures rose 34 cents, or 0.5%, to $74.82 a barrel, after shedding 2 cents on Tuesday in the first decline in six days.
Data from the American Petroleum Institute industry group showed U.S. crude stocks fell by 4.7 million barrels for the week ended July 23, gasoline inventories dropped by 6.2 million barrels and distillate stocks were down 1.9 million barrels, according to two market sources, who spoke on condition of anonymity.
That compared with analysts’ expectations for a 2.9 million fall in crude stocks, following a surprise rise in crude inventories the previous week in what was the first increase since May.
Traders are awaiting data from the U.S. Energy Information Administration (EIA) on Wednesday to confirm the drop in stocks.
“Most energy traders were unfazed by last week’s build, so expectations should be high for the EIA crude oil inventory data to confirm inventories resumed their declining trend,” OANDA analyst Edward Moya said in a research note.
On gasoline stocks, analysts had expected a 900,000 barrel decline drop in the week to July 23.
“The U.S. is still in peak driving season and everyone is trying to make the most of this summer,” Moya said.
Fuel demand expectations are undented by soaring cases of the highly infectious delta variant of the coronavirus in the United States, where the seven-day average for new cases has risen to 57,126. That is about a quarter of the pandemic peak.
Oil Price Rises To $74.70 Despite Delta Variant
Oil price inched higher on Tuesday despite the fast spreading COVID-19 Delta variant. Brent crude oil, against which Nigerian oil is priced gained, $0.20 or 0.27 percent to $74.70 per barrel on Tuesday at 12:05 am Nigerian time.
Delta variant is spreading in China, the world’s largest importer of crude oil, forcing crude oil investors to start cutting down on their oil demand projections.
“The Delta variant is still spreading and China has started to clamp down on teapots, so their import growth would not be that much,” said Avtar Sandu, a senior commodities manager at Singapore’s Phillips Futures, referring to independent refiners.
Strong U.S. demand and expectations of tight supplies have helped crude oil to recover from a 7 percent slump recorded last Monday to mark their first gains in two to three weeks last week.
Global oil markets are expected to remain in deficit despite a decision by the Organization of the Petroleum Exporting Countries (OPEC) and allies, collectively known as OPEC+, to raise production through the rest of the year.
“There is seemingly a battle within the energy complex between the prevailing supply deficit engineered by OPEC+ and the threat of the COVID-19 Delta variant in regions with low vaccination rates,” said StoneX analyst Kevin Solomon.
“The slow take-up of vaccinations will continue to limit some upside in oil demand in those regions, and there will be intermittent spells in the recovery in the coming months.”
Technology4 weeks ago
Opera Becomes the World’s First Alternative Browser Optimized for Chromebooks
Economy4 weeks ago
130 Countries Signs Commitment to Global Tax Rate, Nigeria Abstains
Naira4 weeks ago
Naira Exchange Rates Today, Monday, July 5, 2021
Business3 weeks ago
How to Redeem Gift Cards, Gift Card Rates in Nigeria
Business3 weeks ago
Jeff Bezos Steps Down as Amazon CEO- How Much Power Will He Give Up?
Finance3 weeks ago
African Development Fund Extends $83.6 Million in Grants to Boost Ethiopia-Djibouti Electricity Trade
Government1 week ago
Security Operatives Arrest Sunday Igboho in Cotonou, Benin Republic
Government3 weeks ago
National Intelligence Agency Receives N4.87 Budget to Track Conversations