What Is Going On With Etisalat Nigeria?

Three Nigerian banks are set to take over telecommunications firm Etisalat over unpaid N541.8billion debt.

Etisalat Nigerian Circus Continues (image: Charlie Fripp)
Etisalat Nigerian Circus Continues (image: Charlie Fripp)

After a turbulent start to 2017, Etisalat International announced on Monday that the telecommunications service provider will be pulling out of Nigeria in a matter of weeks. The announcement which was made by Hatem Dowidar, the chief executive of Etisalat International, comes after the company failed to renegotiate a $1.2 billion loan with a consortium of banks following extensive talks. However, later that day, Emerging Markets Telecommunication Services Ltd. EMTS, trading as Etisalat Nigeria, announced that despite their parent company’s announcement, they would be looking to consolidate their “Nigerian Identity”.

 

The Withdrawal

Earlier on Monday, Mr. Dowidar said all UAE shareholders of Etisalat Nigeria, including state-owned investment fund Mubadala, had exited the company and left the board and management. Speaking in an interview with Reuters, he disclosed that discussions were ongoing with Etisalat Nigeria to provide technical support, adding that it could continue to use the brand for another three-weeks before phasing it out. “There’s a new board and we are not part of that company. We have sent our termination letter for the management agreement,” said the Etisalat boss.

Mr. Dowidar also pointed out that parent Etisalat had written down the value of the Nigerian business in its books and that transferring its 45 percent stake to the lenders after loan renegotiation talks collapsed had no impact on the group.

When asked whether Etisalat would consider entering the Nigerian market again, Mr. Dowidar dismissed the possibility of such move, “The train has left the station on that one. Being in that market as an investor … are we willing to risk more money compared to the reward for the long-term?” he asked.

“(Nigerian) lenders may try to continue to operate the company until they find a buyer (or) they may merge the company with the existing players in Nigeria. The brand agreement in either of these two scenarios won’t be a long-term thing, so we take out the brand; in the long term Etisalat won’t be in Nigeria,” he concluded.

The Response 

In a statement responding to reports of the withdrawal of the right to the continued use of the Etisalat brand in Nigeria by EMTS, Ibrahim Dikko, EMTS Vice President for Regulatory and Corporate Affairs, said that the company has a defensible and subsisting agreement with the Etisalat Group, this agreement entitles EMTS to use the Etisalat brand notwithstanding the recent changes within the Company.

Dikko in the statement said “Indeed, discussions are ongoing between EMTS and Etisalat Group pertaining to the continued use of the brand, and EMTS will issue a formal statement once discussions are concluded. The final outcome of the use of the brand in no way affects the operations of the business as our full range of services remain available to our customers.”

The statement which was undoubtedly aimed at easing customer tension, concluded with Ibrahim Dikko reaffirming EMTS’ position that the brand ‘is here to stay’, adding that it would continue to build Nigerian businesses and empower Nigerians with a focus on the youth. “Nigeria remains the soul of EMTS’ business and we have made the brand alluring to our teeming subscribers who see a piece of the spirit and character of Nigeria in everything we do. EMTS is here to stay and we wish to assure our esteemed customers that our core values of youthfulness, customer-centricity and innovation will remain the pillars on which we operate. We thank our esteemed customers for their abiding faith in us,” concluded Dikko.

With these conflicting statements and reports making the rounds, no one knows what the future holds for the “Etisalat Nigeria” brand?

By Dean Workman