NCC Steps in, Says Etisalat’s Licence Not Transferable

Telco announces new shareholding as Abu Dhabi parent pulls out

Citing the Nigerian Communications Act (NCA), the Nigerian Communications Commission (NCC) yesterday stepped into the crisis that has enveloped the country’s fourth largest network operator, Etisalat, reminding the consortium of banks that the telecoms firm is indebted to, to the tune of $1.2 million that it cannot takeover Etisalat’s operating licence without its approval.

A consortium of 13 Nigerian lenders led by Access Bank Plc moved to make good an earlier threat to takeover Etisalat by Friday, following its inability to meet the payment terms on a $1.2 billion loan that it took in 2013 for network upgrade and expansion.

The banks, comprising Access Bank, Zenith Bank Plc, Guaranty Trust Bank Plc, FirstBank Limited, Fidelity Bank Plc, First City Monument Bank (FCMB), Stanbic IBTC, EcoBank, United Bank for Africa (UBA) Plc and Union Bank of Nigeria Plc, among others, said they would takeover Etisalat’s operations through its legal representative, United Capital Trustees.

Emirates Telecommunications Group Company (Etisalat Group), Abu Dhabi, which holds a 45 per cent stake in the Nigerian subsidiary also announced yesterday at the Abu Dhabi Stock Exchange that attempts to stave off the company’s takeover had proved abortive and that the lender banks were closing in.

Serkan Okandan, Chief Financial Officer of Etisalat Group, who made the announcement on behalf of the UAE group and operators of Etisalat Nigeria, said both parties had reached a deal to commence the transfer of ownership to the banks by 5 p.m. on Friday, a development that immediately caused ripples in the telecoms sector.

However, the NCC in a statement yesterday evening by its spokesman, Mr. Tony Ojobo, drew the attention of the lenders to the provisions of the NCA, which provides that the issuance of a licence shall be personal to the licensee and is not transferable to a third party without the written approval of the commission.

Section 38(1) of the Act states: “The grant of a licence shall be personal to the licensee and the licence shall not be operated by, assigned, sub-licensed or transferred to another party unless the prior written approval of the commission has been granted.”

Sub-section 2 states: “A licensee shall at all times comply by the terms and condition of the licence and the provision of this Act and its subsidiary legislation.”

The telecoms industry regulator, in the statement, also assured the 21 million subscribers of Etisalat of the integrity of its network, adding that it would do all within its powers to ensure that they continue to enjoy the services provided by the operator.

Ojobo said: “The attention of the commission has been drawn to the planned takeover of Etisalat by a consortium of banks.

“As a result of this planned action, the commission wishes to state that it is aware of the indebtedness of Etisalat to the consortium of banks.

“In conjunction with the Central Bank of Nigeria (CBN), we mediated by holding several meetings with the banks, Etisalat and other stakeholders with a view to finding a resolution. Regrettably these meetings did not yield the desired results.

“The NCC wishes to reassure the over 21 million Etisalat subscribers that it will do all within its regulatory power to ensure that Etisalat subscribers continue to enjoy the services provided by the operator.

“The commission has taken proactive steps to cushion the impact of the takeover, this is without prejudice to the ongoing effort between Etisalat and the banks towards a negotiated settlement.

“In view of the recent development, NCC wishes to reassure all stakeholders in the telecommunications sector, and in particular the subscribers on the Etisalat network that the commission will ensure that the integrity of Etisalat Network is not compromised.

“Accordingly, the commission has drawn the attention of the banks to provisions of the Nigerian Communications Act (NCA) 2003 Section 38: Sub section 1 – The grant of a licence shall be personal to the licensee and the licence shall not be operated by, assigned, sub licensed or transferred to another party unless the prior written approval of the commission has been granted;

“Sub section 2 – A licensee shall at all times comply by the terms and condition of the licence and the provision of this act and its subsidiary legislation.”