If the bid is accepted, China Unicom will partake in the largest privatization deal on the African continent.
According to Chinese officials, China has been investing billions of dollars in Africa, mainly in mineral and oil assets, planing to expand into telecoms and the banking sector. One of Beijing’s biggest investments in Africa was the acquisition of 20% of South Africa’s Standard Bank for $5.5bn, a deal concluded in 2007 by Industrial and Commercial Bank of China.
Nigeria’s state owned operator has been in decline for years, ending up with 100 000 fixed-lines and a few thousand mobile subscribers. In 2001, the operator had over one million mobile subscribers and more than 500 000 fixed-line customers.
In 2006, the Nigerian government reversed a 51% stake sale in Nitel to Nigerian group Transcorp, for its inability to raise the funds needed and managerial incompetence.
Nitel is now once again in the spotlight, with the consortium, known as New Generations Telecommunication, being the preferred bidder at $2,5bn, followed by Omen International with a $956m bid.
An African telecoms analyst, cited by Financial Times, argued that the bid looks too expensive for a company in dire straights like Nitel.
Nigeria was recently named Africa’s largest telecoms market overtaking South Africa and Egypt.
