Preparing 9mobile for new investors

Boye Olusanya CEO 9mobile

The composition of a new board and management, new brand identity unveil, and Central Bank of Nigeria’s report of positive outlook for 9mobile, formerly trading as Etisalat Nigeria, give prospective investors something to ponder. ADEYEMI ADEPETUN, in this report, reviews the telco’s preparedness for new investors.

Nigeria’s fourth mobile telecommunications operator, 9mobile formerly trading as Etisalat Nigeria, appears to be on its way out of the recent loan crisis that engulfed the company. Barring any unforeseen circumstances, the telecommunications operator now looks set to be one of the investment deals of 2017, as indicators show.

Aligned to the strategic objective of launching the telecom firm back on track for business continuity and profitability, an interim board and management was appointed on July 4, to stir the ship of the firm on the path of stability. The new board comprises Dr. Joseph Nnanna, Deputy Governor, Financial System Stability at the Central Bank of Nigeria (CBN) as Chairman, while Oluseyi Bickersteth, and Ken Igbokwe, are Non-Executive Directors. Boye Olusanya is the new Chief Executive Officer, and Mrs. Funke Ighodaro is Executive Director/Chief Financial Officer. Olusanya replaced former CEO, Matthew Willsher, while Ighodaro took over from the former CFO, Olawole Obasunloye.

Coming after the appointment of a new board and management was a new brand identity unveiled on July 19, whereby the former trading name, Etisalat Nigeria, morphed into 9mobile. Industry watchers considered this as unprecedented because the new brand identity launch was achieved ahead of the three-week ultimatum, which the Etisalat Group of UAE had given the Nigeria arm to phase out the use of Etisalat brand name.

Speaking at the media brand unveiling in Lagos, the CEO, 9mobile, Olusanya, who said the brand is open to willing investors, explained that the new brand identity reflects the bold and creative attributes which the organisation shares with its valued subscribers.

He said the choice of the new name and logo is a deliberate representation and confirmation of 9mobile’s Nigerian heritage, 9ja-centricity, and another phase of its evolution over nine years of operations in Nigeria.  He added that although its name and brand changes, the telco will continue to deliver excellent services to its customers and remain true to the values it has operated with since day one when the network launched into Nigeria in 2008.

“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,” Olusanya said.

He added that the new logo represents resilience and continuity, and also expresses the brand’s thoughts about the future, particularly of digital technology and its continued impact on communication and human interactions. Being a number-themed logo, it reflects the network’s futuristic slant. The colour green, both its light and dark variants, reflects vibrancy, dynamism, life, and youth as well as the brand’s ‘Nigerianness’.
Stakeholders’ assurances

Most recent positive developments around 9mobile have also given fillip to the preparedness of the company for willing investors. The CBN Governor, Godwin Emefiele, revealed this much when he disclosed that the mobile operator’s financial performance looks good despite the loan crisis.

While briefing local and international journalists at the end of the Monetary Policy Committee (MPC) meeting on July 25, in Abuja, he said 9mobile remains strong with a solid revenue base. According to him, the company made N16 billion in June alone, a reassuring indicator of a stable entity.

The CBN Governor, who has been actively involved in the matter between the company and its creditor-bankers, said further the Nigerian Communication Commission (NCC) and CBN intervened in the loan crisis because 9mobile is a major contributor to the national economy. “It’s important that we don’t just allow any creditor to hurt any other stakeholder. Etisalat employs more than 2,000 workers, with over 20 million subscribers nationwide. Any attempt by the creditors to take over the telecom company will jeopardise the interest of its over 20 million subscribers and more than 2,000 workers,” he stated.

The management of 9mobile has also given further vent to this positive development when the CEO, Olusanya, led a delegation of his senior management team on courtesy visits to the Minister of Communications, Adebayo Shittu, the NCC, and House of Representatives Committee on Telecommunications on July 24, in Abuja.

Speaking during the visit, Shittu said the Federal Government stepped into the loan crisis to save the telco, its subscribers, employees and their dependants as well as channel partners from the adverse consequences that would result if the company collapsed. He also assured that government would not fold its hand and allow the company to die, in view of its economic importance to the nation.

Shittu, who congratulated the new management and assured government’s continued support for the telecommunication sector by providing an enabling environment for the industry to thrive, said at the weekend on a radio programme in Ibadan, that many foreign investors are jostling to buy over 9mobile.
Preparing for likely investors

The Executive Vice Chairman, NCC, Prof. Umar Danbatta, also said: “Our major concern was for the about 2,000 Nigerians who are directly employed in the company and thousands more, who are indirectly employed. We were also concerned about how the over 20 million Nigerians who are subscribers on the network would be affected. Our work has not finished; we are still cooperating with you (9mobile) to ensure that you survive and operate seamlessly and profitably.”
The same message of support was expressed when the 9mobile team met with the House of Representatives Committee on Telecommunications led by its chairman, Saheed Akinade-Fijabi, at the National Assembly.

In preparation for new investors, the CBN Governor in his post-MPC media briefing disclosed that the management of 9mobile had appointed Citi, and Standard banks, as advisers to organise a tender to request proposals from prospective investors in line with the strategy for reengineering the company for continuity and increased profitability.

This move may have been confirmed by media reports that some multinationals and local investors including Orange Telecom of France; Vodacom of South Africa; India’s Bharti Airtel; Virgin Mobile, United Kingdom; and BUA Group have indeed begun the paperwork to take up the equities vacated by the two former UAE partners.

Genesis of Etisalat’s transformation to 9mobile
Recall that the telco came into an unusual limelight sometime in March this year, when news of its inability to repay the outstanding of a $1.2 billion loan secured from a consortium of 13 banks broke. The outstanding loan sum is said to be $227 million and N113 billion, all amounting to about $574 million if the Naira portion is converted to US Dollars, meaning that almost half of the loan had been repaid when the issue became public knowledge.

The loan was acquired in 2013, as a medium-term seven-year facility to fund expansion of the network and improve quality of service. Citing the economic downturn of 2015 that led to sharp devaluation of the Naira by about 40 per cent, and which negatively impacted on the value of the dollar-denominated loan as reason, the telco in February informed the banks of inability to meet its next repayment timeline and proposed repayment restructuring.

The telecom firm said it had repaid about 42 per cent of the original loan and serviced it effectively until February 2017, when discussions with the banks regarding the repayment restructuring commenced. The lenders however did not agree to the proposal and this triggered a chain of issues that threatened the existence of the nine-year-old firm including speculations in local and international media of imminent takeover of the company by the banks following failure of negotiations. Some media reports even alleged that the company had been taken over by the lenders.

Another thing was the severance of relationship with the company by its two major partners from the United Arabs Emirate – the Etisalat Group, and Mubadala Development Company. In fact on June 20, Etisalat Group notified the Abu Dhabi Stock Exchange of the transfer of its shares in the local company to an appointed security trustee of the banks. Few weeks after, it also handed a three-week deadline to the Nigerian telco to phase out the use of Etisalat brand name.

The second partner, Abu Dhabi state investment fund, Mubadala Development Company, also pulled out while all its directors on the board of the local arm resigned. In quick succession, Hakeem Belo-Osagie, a Nigerian who was the board chairman of the licencee company, Emerging Markets Telecommunication Services Limited (EMTS), also resigned.

As expected, the series of events created anxiety among the over 20 million subscribers on the network with a few of them porting to other networks. There was also fear of possible job loss among some of the employees despite confidence building effort and reassurance by management to the contrary. Channel partners, distributors and vendors were also uncertain of their fate in the event of the collapse of the telco.