Etisalat Nigeria Crisis: ALTON Rules Out Bailout Option
As the financial management crisis rocking Etisalat Nigeria deepens, following the resignation of its Board Chairman, Mr. Hekeem Bello-Osagie at the weekend, the Association of Licensed Telecommunications Operators of Nigeria (ALTON), has ruled out the bailout option, which many industry stakeholders had suggested as the best option to salvage the telecoms company.
The stakeholders had earlier called on the federal government to intervene in the Etisalat crises by releasing funds as bailout. But ALTON, at the weekend, kicked against the suggestion, insisting that what the government should do is to address its policy formulation and implementation, which ALTON said, were adversely affecting telecoms development in the country.
Chairman of ALTON, Mr. Gbenga Adebayo, who spoke at a breakfast meeting organised by the Nigeria Information Technology Reporters’ Association (NITRA) in Lagos, said policy somersault in the current administration pose serious threats for the telecoms industry, and warned that the collapse of any telecoms operator as a result of harsh government policy, would spell doom for the entire telecoms industry. He said none of the existing telecoms operators has sufficient headroom to accommodate the subscribers of a collapsed network.
Adebayo said the bailout option would further deepen Etisalat’s crises, since bailout money does not come free and must be repaid.
Speaking on the theme, ‘Challenges of Telecoms Operators in a Recessed Economy’, Adebayo advised the federal government to revisit its policies, especially the aspects that are hampering telecoms industry growth.
Citing government’s foreign exchange (Forex) policy, Adebayo said: “The telecoms industry is facing major challenges in purchasing forex to fulfil contractual obligations to equipment suppliers and foreign vendors. This situation is adversely impacting our network operations and also some recent developments in the industry have alluded very clearly to the risks at hand. The prevailing scarcity of forex has occasioned a situation where the banks are unable to obtain forex for an upward period of six months.”
Adebayo, who expressed the dissatisfaction of telecoms operators over policy on forex allocation, said that the exemption of telecommunications equipment and services from items to be accorded priority in the allocation of forex by the banks has adversely impacted the telecoms industry in many ways.
He therefore called on the federal government and the Central Bank of Nigeria (CBN), to include telecommunications equipment and invisibles in the list of items/sectors to be allocated from the 60 per cent
forex availability by the banks. This is to ensure the continued provision of world-class telecommunications services to the consumers, he added.
“Telecommunications service providers are similar to manufacturing firms and deserve to be treated in the same manner. The core network equipment and other auxiliary equipment procured for providing voice and data services are equivalent to plant and machinery acquired by the manufacturing firms for the production of goods and services in the country,” Adebayo said.
He queried the rationale behind government’s policy to exclude telecoms facilities from priority list for forex allocation, yet it included that of the manufacturing firms.