MTN Nigeria opens talks to buy stakes in 9mobile

MTN Nigeria has been holding talks with 9mobile owners in what may see the largest mobile phone acquire stakes in the nation’s number four mobile operator, Technology Times has learnt.

Barring any last minute change, MTN Nigeria, owned by South Africa’s MTN Group, and Emerging Markets Telecommunication Services Limited (EMTS), owners of 9mobile (formerly Etisalat Nigeria), are in advanced stage of frequency spectrum trade negotiations as a viable option for closing the telecoms deal, Technology Times has learnt from credible telecoms industry sources.

The spectrum trade option is being considered to revive the struggling 9mobile after the telco fell on hard times in the wake of the exit of its key technical partner and investors, Mubadala of UAE and Etisalat of UAE.

The pullout of the former Etisalat Nigeria Arab investors was later to trigger a chain of reactions that included an attempted hostile takeover by creditor banks in Nigeria, shareholders rift and subsequent loss of market share by the GSM market’s last entrant.

Mr Godwin Emefiele and Professor Garba Danbatta, Nigeria’s banking and telecoms regulatory chiefs under President Muhammadu Buhari’s administration, were to later intervene to save 9mobile from takeover attempts by the creditor banks.

9mobile at the weekend denied that its spectrum is about to be acquired by MTN Nigeria upon enquiry by Technology Times.

“Our attention has been drawn to the speculated acquisition of 9mobile’s Spectrum by MTN. We would like to clarify that these assertions are entirely baseless and without factual merit,” Chineze Amanfo, 9mobile Public Relations Lead says in a message to Technology Times.

“In the second quarter of 2023,” the spokesperson says, “9mobile invested over ₦70 billion for ongoing network modernisation. Over 600 new sites, equipped with 4G LTE facilities for enhanced operations and market competitiveness were deployed alongside new broadband services to enlarge our fibre network across Nigerian cities.”

Amanfo says that “9mobile remains focused on meeting the needs and aspirations of our growing customer base through our improved data rollout and innovative products and services.”

At the time of filing this report, Funso Aina, MTN Nigeria spokesman, did not respond to enquiry on the matter when asked for clarification on the matter.

Meanwhile, Technology Times has learnt that MTN Nigeria and 9mobile owners are hedging their bet on the spectrum trade option to bring the telco back in competition and are looking at recent local telecoms reforms as a leeway. 

The option of spectrum trade between MTN Nigeria and 9mobile was said to have reached an advanced stage under the Buhari administration but was temporarily suspended after the impending deal faced pushback over competition concerns.

If granted regulatory clearance, the acquisition of 9mobile’s spectrum by MTN Nigeria will create a monopoly that will have over 50% of the telecoms spectrum stockholding and control over 80% of the Nigerian telecoms market, a source conversant with developments within the telecoms regulatory agency, NCC, says on condition of anonymity.

Nigeria’s largest mobile operator has been on a spectrum acquisition spree across the telecoms industry and beyond that has made MTN Nigeria become owner of spectral resources previously held by Visafone, Intercellular, among others. 

MTN Nigeria has recently closed a spectrum lease deal with rival mobile phone company, Ntel, the company that acquired the country’s pioneer national operator, NITEL.

EMTS, owners of 9mobile, launched a high profile entry into the Nigerian market when they acquired a Unified Access Service Licence (UASL) from NCC in 2007. The unified licence enables 9mobile to provide fixed telephony (wired or wireless), Digital Mobile Services, International Gateway Services and National/Regional Long Distance Services in addition to spectrum assignments in the 900 and 1800 MHz bands.

EMTS was later to purchase the 3G licence of Alheri Mobile Services Limited, a fully owned subsidiary of the Dangote Group owned by Nigerian businessman Aliko Dangote in a spectrum trade deal. 

The acquisition of the Alheri Mobile’s 3G licence was to put the then Etisalat Nigeria (now 9mobile) on equal footing with the three incumbent mobile giants, MTN Nigeria, Airtel Nigeria and Glo mobile.

Thomas Etuh: Why 9mobile Board Chairman is man to watch in MTN-9mobile spectrum trade talks

Following the entry of new leadership across Nigeria’s telecoms policy and regulatory landscape with the emergence of President Bola Tinubu’s administration, MTN and EMTS are understood to have renewed the spectrum trade talks and dusted up plans for the successful close of the deal.

Technology Times learnt that Thomas Etuh, the current Chairman of 9mobile Board and former Chairman of Board of Directors at Unity Bank, is expected to be a prime mover to conclude the 9mobile spectrum trade deal with MTN Nigeria.

The companies are understood to be considering a virtual mobile network operator (MVNO) arrangement to enable them fast-track the spectrum sale that may see 9mobile piggybacking on the MTN Nigeria network. 

They reckon that going this route will be met with minimal opposition from people who may raise competition concerns that may create stumbling blocks for getting regulatory clearance for the telecoms deal.

While details of the financials are still hazy, the former Unity Bank’s Chairman with stakes across several sectors of the economy, particularly the fertiliser value chain, will be the man to watch considering his high network across the economy and key friends and associates. 

Under the umbrella of Fertilisers Producers & Suppliers Association of Nigeria (FEPSAN), the industry group of players in the fertiliser value chain where Etuk is currently President, his company, TAK designed The Presidential Fertilizer Initiative (PFI) in Nigeria that has yielded results that included significant price drop from N13,000 to N5,500 per bag of fertilizer and complete elimination of N60 billion to N80 billion in budgetary subsidy while “fertilizer is readily available and affordable all over the country,” according to the company’s website.

Technology Times has also learnt that barring any last minute change, Lighthouse Capital Limited, a Nigerian financial services company that also specialises in investment banking, may emerge as a key investment vehicle for the 9mobile Board Chairman to consolidate his investment in the mobile phone company, and serve as vehicle for the proposed spectrum trade deal with MTN Nigeria.

The 9mobile Board Chairman’s son, Emmanuel Etuh, serves as Non-Executive Director at Lighthouse Capital Limited, which as of December 2022, held 1,053,199,290 shares representing 9.01% of Unity Bank, where his father was former Chairman. 

The younger Etuh, Emmanuel, currently serve as Non-Executive Director on the board of Veritas Kapital Assurance Plc, where the older Etuh formerly held the position of Chairman.

John Vasikaran, 9mobile’s Chief Operating Officer (COO), will also be someone to watch in the spectrum trade talks as he was brought on board because of his knowledge of the local telecoms terrain with his network spanning the private and public sectors.

Vasikaran, who was former personal aide to Dr Mike Adenuga, Globacom Chairman, who owns Nigeria’s second national operator (SNO) that also owns Glo mobile, was brought in as 9mobile’s COO because of his telecoms market experience, particularly local industry knowledge gained from working with the Nigerian telecoms billionaire.

While with Adenuga, Vasikaran gained insights into inner dealings within key corridors of telecoms and business in Nigeria after having served as former aide to the telecoms and business magnate and held key positions within his business across Conoil, Globacom and its mobile business unit in Ghana, Glo Ghana. 

The 9mobile COO’s bio says that he served as “an active member of the core team” for building the Nigerian SNO, Globacom

Technology Times further learns that the MTN Nigeria and 9mobile owners are banking on the new regulatory reforms unfolded by the Nigerian Communications Commission (NCC) that has opened up the telecoms industry to the entry of MVNOs.

Under plans to further deepen competition in the telecoms market, NCC has issued 42 MVNO licences to new entrants that have been promised subsidy and other incentives including opportunities to explore stakes in rural and underserved parts of Nigeria. 

The NCC reforms have sparked a round of frenzy among new entrants that will piggyback on the infrastructure of incumbent mobile operators like MTN Nigeria, Airtel Nigeria and Glo mobile.

For prospective MVNOs in Nigeria, the five-tiered licence attracts authorisation fees split across Tier 1, ₦35,000,000; Tier 2, ₦60,000,000; Tier 3, ₦130,000,000; Tier 4, ₦200,000,000 and Tier 5, ₦500, 000 000.

For the 9mobile spectrum trade deal to receive clearance under the new administration, the owners of MTN Nigeria and EMTS are now exploring the MVNO route, Technology Times has learnt.

What is at stake?

At stake in the impending 9mobile spectrum trade is a fresh round of battle for control of Nigeria’s telecoms market where MTN Nigeria, the nation’s largest telco, has 85,005,917 mobile customers and 38.58% of the GMS market while the number four player, 9mobile, has 13,791,079 representing 6.26% of Nigeria’s GSM lines with active phone lines totalling 220,361,186 as of August 2023.

While Nigeria’s overall active phone lines reached 220,715,961, representing 115.63% in August, internet users was 159,034,717 while broadband connections was 86,993,472 representing 45.57% penetration of the high-speed data service across the country, according to official information by NCC.

In 2022, Nigerian telecoms industry recorded an increase in the number of active subscribers that rose from 195,463,898 subscriptions in 2021 to 222,571,568 by December 2022. The active subscriptions increased by 27,107,670 subscriptions representing a 13.86% increase in active subscriptions year-on-year, which saw telcos generating ₦3,856,026,156,380.29 by 2022, according to NCC.

Within the period, domestic investment by telcos was ₦785,771,028,960.36 as at December 2022 while operating cost was ₦2,092,815,085,166.00. 

The telecoms regulator attributes operators’ subscriber base growth to subscriber loyalty, promos, seasonal effects, aggressive consumer acquisition drive, and competitive product offerings across all the networks. 

The increase in active subscription, the telecoms regulator says, impacted positively on other derived telecom indicators such as teledensity, internet Penetration and broadband penetration. 

Nigeria’s teledensity increased from 102.40% as at December 2021 to 116.60% by December 31st 2022. Active subscriptions also increased by 13.86% indicating that over a tenth of persons per 100 subscribers were connected year-on-year.

The same goes for internet subscribers, which increased from 141,971,560 subscriptions as at December 2021 to 154,847,901 subscriptions as at December 2022, representing an increase of 9.06%. 

Broadband subscriptions also increased from 78,041,883 subscriptions in December 2021 to 90,398,960 subscriptions as at December 2022. Broadband penetration increased from 40.88% as at December 2021 to 47.36% as at December 2022. 

Data usage also grew following the increase in the volume of data consumed in the year end December 2022 when compared with the year-end December 2021. The total volume of data consumed by subscribers increased to 518,381.78TB as at December 2022 from 353,118.89TB as at December 2021 representing an increase of 46.77% in data consumption within the period.

The List: 42 MVNO Licensees in Nigeria

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