Etisalat Nigeria and a Badgering Banking Industry

By MKPE ABANG

Etisalat Nigeria launched operations in October 2008 with quality service as its selling point, be it voice or data, a promise it has striven so hard to keep in the midst of daunting challenges.

Unlike in many other countries of the world, the mobile operator in Nigeria is also a power company, a security outfit, an oil and gas firm, a trainer of labour, the list of challenges is so tall, there is hardly an end.

Because the government has provided little or no infrastructure – where it exists at all it is in decrepit state – the mobile phone operator in Nigeria must provide the entire infrastructure plus everything else it requires to run its operations – and still face multiple taxations many of which are inexplicable.

Now with over 20 million subscribers on its network, rather than be allowed to face the core mandate of optimising its network to continuously deliver the quality services it pledged to its subscribers, Etisalat Nigeria has a new challenge, on top of the above, to surmount: the consortium of banks that lent it $1.2 billion in 2013 are breathing down its neck!

Nigerians woke up in March this year to very worrisome pieces of news in the media, first as rumours then as the storm gathered, it become clear that there might have been some truth behind it after all: that the consortium of banks were threatening Etisalat with a take-over.

Although it turned out that such a threat was not as it was painted, the fact that the telecom regulator, the Nigerian Communications Commission (NCC) and the banking regulator, the Central Bank of Nigeria (CBN) rallied in meetings, to keep tempers down, meant there was in fact need to worry.

And, if anyone thought that was done over with, then such a person is sourly mistaken. Over two months down the line, still there is no clear statement from the consortium of banks clarifying their position on the Etisalat Nigeria loan deal, thereby leaving much to speculation, which is unhealthy – neither for the banking industry nor for the telecom sector.

Whereas in other climes, such a consortium of banks would do their utmost to encourage the borrower to function without let or hindrance, so as to grow and succeed, and thus go on paying the loan till it is liquidated, Etisalat Nigeria is obviously not enjoying such consideration from its lenders, it would seem plausible to infer.

At the time Etisalat Nigeria received the loan, the Naira exchanged at around N160 to the US Dollar in the parallel market. By early this 2017, the same $1 could only be got for as much as N480 – or more – in the same parallel market; whereas in 2013, the dollar could easily be accessed, since the last quarter of 2015, the dollar has become completely inaccessible. There obvious hurdles – fallouts of the recession – could not have been the making of the borrower!

When therefore, Etisalat Nigeria missed the repayment schedule for a couple of months, in a recession that has become globally known, it was only to be expected that its creditors would empathise with the company, rather than letting anyone create the impression of the company being unable to honour its obligations, a situation that could easily weaken confidence not only in Etisalat Nigeria, but in the fledgling telecommunications sector in the country.

What good is a bank if it is happy to lend money to a company but has no interest in helping the debtor grow and succeed in order to repay? This therefore has become the question many Nigerians are asking as the consortium of banks is yet to come clear on its position with Etisalat Nigeria.

To keep the public well informed of the facts regarding its indebtedness to the consortium of banks and its unalloyed resolve to fulfil its obligation to the creditors, the company issued a statement in Lagos, thus affirming not only that its operations remain undisturbed, but indeed reassuring its subscribers and the global community that there was no cause for alarm after all.

In the statement issued on June 6, 2017 and signed by the Etisalat Nigeria’s Head, Environment Compliance & Public Relations, Ms Oluseyi Osunsedo, the company stated unambiguously, thus:

“Etisalat Nigeria confirms that it is still in discussions with its lenders regarding existing obligations under the syndicated loan agreement signed in 2013 and wishes to add that it has not received any formal communication from the lenders regarding the proposal.

“Whilst we are aware of recent news reports stating that the offer has been rejected by the banks, we cannot confirm this as true as no formal communication has been received from the banks regarding the proposal.

“Etisalat has so far held robust discussions with lenders in good faith, and we hope that all areas of discord will be resolved in due course. Indeed the current economic challenges have occasioned untold hardship on the telecom industry as a whole, thus requiring a major shift in position by all affected parties.

“We continue to explore all available options to pull through this phase. We will continue to engage all relevant parties in earnest with a view to securing a mutually agreeable outcome.

“Furthermore, we are not taking anything off the table at this time, and Etisalat assures all stakeholders that the on-going discussions are not intended nor expected to impact negatively on the company’s ability to continue providing seamless communications services to our subscribers.

“Etisalat will continue to focus on providing uninterrupted services to subscribers on our network.”

With such a statement it is hoped that the public can rest assured Etisalat Nigeria will continue to offer services without interruptions; for, after all, when the loan agreement was signed, it was a show of confidence in the Nigerian telecom sector; and, as a boost to the economy, it is a positive page that should remain open.

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