- 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?
Oil Dips Below $62 in New York Though Banks Say Rally Can Extend
Oil Dips Below $62 in New York Though Banks Say Rally Can Extend
Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.
Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.
The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.
Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.
“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.
- West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
- Brent for April settlement fell 8 cents to $65.16
Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.
JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.
Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return
Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return
Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.
Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.
Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.
“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.
For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.
OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.
“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.
Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather
Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.
The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.
Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.
U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.
“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.
However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.
“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.
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