You are here

Subscribers Panic as Banks Descend on Etisalat over N541.8Bn Debt

PrintPrintEmailEmail
peter oluka

Chief Deolu Ogunbanjo, National Association of Telecommunications Subscribers (NATCOM), has warned that Etisalat network’s subscribers are likely to face challenges, unless the banks are ready to commit more funds to upgrade the infrastructure.

This came as a consortium of banks reportedly descended on the telco despite efforts by the Nigerian Communication Commission (NCC), to broker a peaceful resolution between the telecoms firm and the banks over a N541.8bn debt.

The consortium made up of some foreign and Nigerian banks; including Guaranty Trust Bank, Access Bank and Zenith Bank, have been having a running battle with the mobile telephone operator over a loan facility obtained in 2015.

The loan, which involved a foreign-backed guaranty bond, was for Etisalat to finance a major network rehabilitation and expansion of its operational base in Nigeria.

However, following the failure of the company to meet its debt servicing schedule agreed since 2016, the three Nigerian banks, prodded by their foreign partners, reported Etisalat to banking sector regulator, the Central Bank of Nigeria (CBN), and its communications sector counterpart, the NCC.

Although Etisalat blamed its inability to fulfil its obligation to the banks on the current economic recession in Nigeria, the banks said their attempt to recover the loan by all means was fuelled by the pressure from the Asset Management Company of Nigeria (AMCON), demanding immediate cut down on the rate of their non-performing loans.

Ogunbanjo told Nigeria CommunicationsWeek that it was unfortunate the Etisalat’s parent company could not save the situation, adding that subscribers are likely to face poor quality of service (QoS).

He said on telephone, “It is unfortunate and unbelievable that Etisalat’s parent company coming from the United Arab Emirates (UAE) could not fund it or bail it out from the current financial impasse with three Nigerian banks.

“About three years ago, Etisalat was declared the best network in Nigeria but recently we have noticed that the quality of service has degenerated. The only concern telecom subscribers (Etisalat) have is the issue of quality of service; we believe the banks we see reasons to invest on infrastructure to boost the so called 4G LTE the network launched sometime last year. So, that is the only fear we have as subscribers.

But, the NCC appears not to be favourably disposed to the takeover proposal, the source said, as it believes Etisalat was not only a viable going concern, but also willing and able to negotiate its loan servicing.

To this end, the NATCOM president said the regulator (NCC) cannot really influence the decision which was necessities by probably poor management leading to non-fulfillment of obligations to the financial institutions.

“There is little or nothing NCC can do at this stage, because it was purely failure of the management to ensure return on investments (RoI). Thus, NCC can only regulate networks based on the spelt out key performance indicators,” he told Nigeria CommunicationsWeek.  

Etisalat is Nigeria’s fourth largest telecoms operator, with about 21 million subscribers as at January 2017, according to the NCC. It commenced business in Nigeria in 2009.

 

 

 

 

 

 

Section