Nigeria: Dangote Group, Intercellular in Acquisition Talks

October 21, 2007 • Mobile and Telecoms

According to information that was made available to HANA’s correspondent in Lagos, Dangote and Intercellular have been talking for sometime now and that talks are ongoing.

Dangote is bidding for the FWO through its telecommunications subsidiary, Alheri Engineering. Aheri had in January won a license to provide 3G services in the country.

Those close to the discussions say the companies were yet to agree on final terms, as the financial details of the takeover are still to be resolved.

Intercellular began operations in 1998. However, its operations have been limited mainly to Lagos where it has secured wide acceptance. But unlike its competitors, Intercellular has not been able to attract the financial backing needed to embark on a national rollout strategy in order to secure increased customer base.

In 2006, Intercellular was one of the six firms that acquired Unified Access Service license, as part of the preparations to offer national mobile services with full roaming facilities.

Contacted to speak on the matter, the spokesperson for Dangote Group, Mr. Joseph Okonmah, said he could not comment on it for now.

Industry experts say that the take-over of Intercellular or any fixed wireless operator would be in the interest of Alheri, which won a 3G license. Okonmah said Alheri was already perfecting plans for the roll out of the 3G services.

He said, “Preparations are in top gear to rollout. Though I cannot ascribe a date to it, but by the time of the rollout we will have substantial coverage in the country.” Before the current talks with Dangote, there had been other attempts by Intercellular’s owners to sell the firm. In January 2006, Intercellular announced that it had sold a 51 per cent stake to the South African- based Telecel for $137.5 million, but in February 2007 it was reported that the deal had collapsed.

Intercellular was granted a license in Sierra Leone in 2004, and has also applied for licenses in Benin, Chad, Guinea, Liberia, and Mali. The communications director at Intercellular, Mr. Fidel Otuya, said the firm was in discussions with investors but could not confirm or deny a possible pact with Dangote Group.

The acquisition of smaller operators by bigger ones has become a common feature in Nigeria’s telecoms sector with the advent of the Unified Access Service regime by the Nigeria Communications Commission.

Earlier in the year, MTN Nigeria acquired VGC Communications for about $75 million. Jim Ovia’s Visafone also acquired for about N3 billion.

Source: HANA



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