What the Etisalat fall really means


A closer look at the ‘facts behind the figures’

By Anthony Opara


What happened in MTN a few weeks ago where over 180 staffers were sacked in what the company called a voluntary retirement scheme will be a child’s play compared to the fate awaiting staff of Etisalat when the consortium of banks led by Access Bank finishes restructuring in order to mop up the nearly two billion dollars debt by the telecommunications giant to them.

At the moment, the management of Etisalat has literally passed into the hands of a consortium of banks headed by Access Bank PLC.  This followed the failure of the Hakeem Belo-Osagie’s Emerging Markets Telecommunication Services (EMTS) to save one of the leading telecommunication companies in Nigeria.  The company had borrowed $1.2 Billion (N541.8 Billion) for network expansion in 2013 but has been unable to pay back the loan in spite of its 21 million subscribers which is huge by all standards.

Etisalat took the $1.2 Billion loan when the exchange rate was N192 to 1 $ which was then 231 billion.  This loan is not valued at over 500 billion Naira including accumulated interest. The management of the company said the inability to repay the loan is due to the current recession.  The major shareholder of the company, Etisalat UAE has already transferred it shareholding to a trustee to hold the shares in trust for them.  Emirates Telecom Company, Abu Dhabi which holds 45% shares of the Nigerian subsidiary announced at the Abu Dhabi Stock Exchange that attempts to stave off the takeover by the banks proved abortive.

Industry watchers are of the view that the management of the telecommunication giant may have squandered the loan rather than invest on network expansion noting that from 2013 until now there is no discernible change in the Etisalat network as it has been as just like the others with the company ripping off subscribers with all sorts of value added but unnecessary services for which subscribers are meant to pay. The company is also guilty of sacking staff without serious infraction as well as bringing in expatriates for jobs that Nigerians can and usually do while the so-called expatriates receive massive foreign currency in salaries and allowances.  The company just like the others of its ilk in the sector, also has foreigners in strategic positions with Nigerians just tagging along with no plan for Nigerians to take over at some point in time. Fears are rife that the company, which is managed by the Oxford-trained Chief Executive Officer, Matthew Wilshire may have repatriated most of the borrowed funds out of the country rather than invest in any network expansion.

It will be recalled that the National Communications Commission, the regulatory agency of the telecoms industry tried desperately to stave off the takeover by the banks but the series of meetings did not yield any effort as the banks had to insist on recovering the loans given that they are in business to satisfy their shareholders .  NCC intervened in the interest of the staff of the company who would be the first to lose out in a restructuring arrangement.  Nigerian companies are fond of sacking their staff at the slightest challenge which is traceable to a national predilection for under-valuing human resource.  Sacking of staff is usually justified under all kinds of excuses and like in the case of MTN, the excuse given is to inject new blood into their operation.  The company has been giving assurances to their subscribers that their services will not be degraded on account of the take over but industry watchers say this is just sound bite as very soon the impact of the take over will be felt as the consortium of banks are not equipped to manage a network and not even one tottering on the brink due to mismanagement.

The NCC however seem to be thinking of the staff when in a statement, Mr Tony Ojobo, NCC’s Director of Communication reminded the banks that the license issued to the telecommunication outfit was not transferable to a third party without the express and written approval of the commission. The commission assured the subscribers of the integrity of the network adding that all would be done to ensure that there would be no breach of the services of the company as a result of the takeover.  Many say this is mere talk as the commission is in no position to guarantee anything.  Those who hold this position argue that if the NCC was in a position to do anything they would have insisted on good management of the loan obtained from the banks rather than allowing the company to be put in  a position where it’s now unable to repay the loan.  Some accused the NCC of dereliction of duty as a minor thing as getting the networks refrain from sending unsolicited text and voice messages  as well as scamming them through unnecessary value added services have not been achieved as the networks scoff at them by continuing engaging in spam SMS and voice calls all targeted at making the subscribers part with their hard earned money.

Etisalat is the third largest network in Nigeria after MTN and Glo but with this take over it appears it may now be a case of ‘going, going, GONE’ for the network that purports to keep Nigerians talking.



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