Bharti Telecom, the holding company of India’s Bharti Airtel, sold a 2.75 per cent stake in the operator to institutional investors to raise INR84.33 billion ($1.12 billion) to fully repay its debt.
In a statement, Harjeet Kohli, group director of Bharti Enterprises, said with the completion of the share sale, Bharti Telecom becomes a debt free company, “providing even stronger financial flexibility and capacity to provide any additional shareholder support as may be desired by Bharti Airtel from time to time”.
Kohli claimed the strong response received from a diverse mix of investors across geographies, even during challenging global macro-economic conditions, shows the competitive strength and the long-term prospects of Airtel.
The investors included Blackrock, Fidelity, Segantii Capital, Norges Bank and Key Square Capital, The Economic Times reported.
Airtel’s credit profile will also be boosted as it will stand to benefit from deleveraging on a consolidated basis, the statement added.
After the transaction, Bharti Telecom’s stake in Airtel dropped to about 36 per cent. The combined holdings of Airtel’s main shareholders – Bharti Group and Singtel – fell to 56.23 per cent from 58.98 per cent.
Over the past month, rival Reliance Jio’s parent company Reliance Industries sold around 17 per cent of Jio Platforms for $10.46 billion to five different investors, also in a move to reduce debt.
Jio Platforms operates broadband and online commerce services, including Jio, India’s largest mobile operator with 388 million subscribers.
Nigerian Active Phones Tops 209m￼
The Executive Vice Chairman of the Nigerian Communications Commission, Professor Umar Danbatta disclosed this while delivering the Keynote Address at the dinner hosted by the Board of Trustees of the Nigeria Media Merit Award, NMMA, to flag-off the commemoration of the 30th Anniversary of NMMA as Africa’s foremost media excellence recognition institution, at the Lagos Sheraton Hotel on Tuesday night.
“This represents a teledensity of 109.47%. Besides, basic Internet subscriptions have also grown from zero in the pre-liberalisation era to over 152 million. It is also gratifying that the broadband subscriptions now stand at 85 million, representing a 44.49% penetration,” Danbatta said.
Dwelling on the topic, “The NCC New Strategic Vision (Implementation) Plan (SVP) 2021-2025: A Transformation Agenda”,which signposts thedirection of the Nigerian telecom industry in the next five years,Danbatta recalled the trajectory of the evolution of telecoms in Nigeria.
Represented by the Director, Public Affairs of the NCC, Mr. Reuben Muoka, the CEO of NCC, he recalled the nation’s showing of a paltry 18,724 telephone lines at independence in 1960 to serve a population of 40 million people, translating to a teledensity of 0.5 at that time.
Today, “the Information and Communication Technology (ICT) sector contributed 18.44 per cent to the nation’s Gross Domestic Product (GDP) in the second quarter of 2022. From this figure, telecommunications sector alone contributed 15 per cent,” Danbatta said to place on record the unprecedented contribution of the telecom and ICT industry to GDP.
N200 Billion ICT Bank and other Strategies to Rescue the Nigerian Telecom Sector ￼
By Elvis Eromosele
The Nigerian telecommunications sector must have nine lives. No, it is not a cat. It is however almost always in a near constant mortal struggle with the forces that be – read, government and its agents. The fact that it’s still here means that it has somehow managed to survive, remained sustainable and even dared to thrive. It is a phenomenon that ought to be studied.
Every indicator shows that the telecom sector remains the bright spot in the nation’s weak economy. It drives socio-economic development, boosts productivity and contributes to improving the lives of citizens like no other sector.
The COVID-19 pandemic impacted negatively on the global economy by precipitating lockdown and economic disruptions with transport, tourism and aviation sectors tumbling. The telecom sector however continued to “buga”. It saw an increase in voice service and massive growth of digital channels for daily routine activities ranging from telecommuting to entertainment and social engagements. The sector witnessed the growth and saw huge profits as financial reports from major operators show.
The Nigeria Telecom sector is a gift that keeps on giving. It has witnessed strong growth in recent years and is expected to have continued growth over the foreseeable future. The growth in the sector, according to industry watchers, has been driven by the increasing population, growing demand for communication services, and rising adoption of smartphone services. Some experts have pointed to strong support by the regulatory authorities which in recent times has led to the licensing of the 5G network in the country – a feat some have called the first in Africa.
Investors in telecom operations are smiling at the bank. It is not surprising therefore that everyone wants a piece of the action, even the government.
It must be stated that the government collects the value-added tax, annual operating levies, licensing fees and duties among others. This is in addition to all the other statutory taxes including PAYE and withholding tax.
Now, there are reports that the Finance Minister, Zainab Shamsuna Ahmed, is actively pushing for another tax, a five per cent excise duty on telecoms services. Most right-thinking Nigerians, including, interestingly, the Minister of Communications and Digital Economy, Prof Isa Ali Ibrahim Pantami, have kicked against it. If a recent news report is to be believed, the finance minister is not backing down.
If the government is keen on milking the telecom sector, it should at least step up on its behalf and help tackle some of the long-standing issues that have held the sector back.
The challenges are not new. Many of them have plagued the sector since the liberalization of the industry. Industry experts are quick to point out the fact that these challenges are also opportunities when viewed through the right lenses.
Here are seven of the most pressing challenges, with what I hope are feasible solutions. The government should give it a look-in if doesn’t want to kill the goose that lays the golden egg.
Difficulty in accessing long-term funds for the industry – The government must hasten to establish an ICT Bank. While it should be in the mould of the Agricultural Bank, it should operate like a venture capital entity. So, after due diligence, the ICT Bank will invest in tech starting with a clearly stated exit /pull-out date. I propose an initial take-off grant of N200 billion naira only.
Right of way – The goal of the right of way policies should not be revenue generation but to facilitate the speedy deployment of telecom infrastructure. In the short term, states can take a leaf from Ekiti State which reduced telecom’s right of way charges by 97 per cent. For the long term, states should install road ducts on a build-and-lease basis. The federal government can set an example here by installing ducts on all new federal roads and leasing to operators based on an agreed realistic billing scheduled for usage.
Multiple taxations – Again, governments at all levels, need to stop seeing telcos as only cash cows. Efforts must be towards proper harmonization of taxes and levies and so make it uniform across every state and locality. This will undoubtedly aid the planning and deployment of services by operators.
Energy challenge – Yes, the telcos knew that Nigeria had a power problem when they paid for licenses in 2001. But who could have imagined that the issue will persist unresolved, for this long? Currently, the logistics of ensuring round-the-clock availability of power is a nightmare that keeps whole teams awake many a night. A straightforward solution is the establishment of energy parks to serve critical infrastructure. QED!
Local content – Some progress has been made here, especially through the National Office for Technology Acquisition and Promotion (NOTAP). To move forward the government and other corporations need to host local content locally. As a corollary, Nigeria must urgently adopt the doctrine of data sovereignty.
Multiple regulations – This is another problem that is almost as old as the industry itself. The NCC has done a lot of work here. Nigeria must explore a converged regulatory regime as the way out.
Capacity building – Human resources have always been an issue but the recent increase if the rate of migration has made it a mini-crisis. The Nigerian Universities Commission (NUC) and the NCC have their work cut out for them – bridge the gap between academia and industry via curriculum reform involving the industry and internships.
I’ll be the first to admit that these problems and solutions are not exhaustive. The NCC may want to consider calling a stakeholder forum to deliberate on the problems and proffer solutions. The white paper produced can now be the basis of engagement with the government and its relevant agencies.
For the government, the focus should not be only on sharing the existing telecom cake, but also on helping the industry bake a bigger cake.
Elvis Eromosele, a Corporate Communication professional and public affairs analyst lives in Lagos.
Broadband Penetration, National Identity, Key To Attaining Digital Economy– DG NITDA
The Director-General, National Information Technology Development Agency (NITDA), Kashifu Inuwa CCIE, has highlighted broadband penetration and digital identity amongst critical areas to the attainment of digital economy.
highlighted that setting the Digital Identity process on track will ensure effective implementation of the National Digital Economy Policy and Strategy NDEPS, within the stipulated period.
highlighted Broadband Penetration, Digital Identity amongst critical areas to the attainment of Digital Economy. Adding that to achieve positive outcome in regard to Digital Economy, there is need for connectivity, and identify who consumes or provides the services and also you should be able to pay for the services.
Inuwa who said this while playing hosting for the Nigeria Digital ID4D Project Team at the Agency’s Corporate Headquarters Abuja, said for the country to achieve positive outcome in regard to digital economy, there is need for connectivity.
The DG informed the Team that NITDA’s mandate of developmental regulation is in line with what ID4D is working on, while pledging the Agency’s unalloyed support.
He acknowledged that collaboration between NITDA and ID4D as well as other relevant partners will be welcomed with an open arm.
Inuwa reiterated that government cannot do it alone, there by urging ID4D to help in whatever way they can for Nigeria to get this digital identity and implement policies and mandate.
“Identity is key to digital economy. We believe we need each other to succeed. Our mandates are interwoven, we need Identity to succeed, and you also need us for the Identity to be used in digital economy”, the DG said.
While expressing confidence that the Nigerian Digital space will soon compete with its peers globally, Inuwa said “IT is dynamic. That is the reason why we are reenacting our own Bill that was passed in 2007; a lot of vocabularies are obsolete and things have changed, without that enactment, it will be difficult for us to deliver. We need to have a robust Law, because technology is growing and becoming dynamic.”
He also expressed concern with regulating the digital space, which he described as ungoverned space that needs to be regulated in the best way. “The right regulation does not exist, we need to co-create it, because it is not something that you can learn from the previous generation, due to its non-existence during their time, it’s our collaboration that will bring the desired changes in developing the nation’s IT sector,” he noted.
Earlier in his address, the coordinator, Nigeria Digital ID4D Project, Musa Odole Solomon, appreciated NITDA’s stride in sanitising the Nigerian digital space.
Solomon said the ID4D Project objective is to increase the number of persons with a National Identity Number (NIN) and issue a robust and inclusive foundational Identity system that facilitates their access to services.
He added that, “The project is designed following an ecosystem model, and not limited to any single organization. It involves different Agencies of government, private sector and civil society. The project had since identified NITDA as an important ecosystem implementing partner.”
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