Telecom makes progress in debt talk, loses 2.9 million subscribers in 6 months

Etisalat’s operations has been hugely affected by the poor network investment, occasioned by $1.2bn debt to eight Nigerian banks.

Etisalat Nigeria Limited

Findings by our correspondent and statistics available on the Nigeria Communication Commission’s (NCC) website showed that active users on the network dropped from 22.5 million in September 2016 to 20.8 million by December of the same year.

This drop implies a loss of about N3.1bn (based on industry’s average revenue of N1,830 per user) potential revenue for Etisalat, who is currently struggling to ensure repayment of $1.2 billion loans taken from over 8 banks in Nigeria.

Likewise, in Q1 2017, the telecom company lost 1.2 million active users as well. This could also be estimated at a revenue loss of about N3.8bn.


Speaking on this development, a staff of the one of the leading telecommunication infrastructure company who craved anonymity said Etisalat’s operations have been hugely affected by the poor network investment, occasioned by $1.2bn debt to eight Nigerian banks, and has adversely affected the company’s ability to deliver quality service as well as impeding its expansion.

Fact checks on the NCC statistics showed that all telecom companies in Nigeria except Globacom, experienced a decline in the number of subscribers within the same period. Globacom increased its subscribers from 36.9 million to 37.3 million, while the telecom giant, MTN Nigeria, had active users dropped from 60.5 million to 60.3 million.

On the progress being made as regards the debt talk, the Vice-President, Regulatory and Corporate Affairs of Etisalat Nigeria, Ibrahim Dikko, noted that remarkable progress had been made to resolve the loan crisis.

“We are optimistic that an agreement will be reached shortly and this will be communicated through the appropriate channels of the involved stakeholders.


“As a business, our immediate focus is to ensure that we not only sustain a positive performance, but that we are in a position to continue to grow the business, deliver excellent customer service and increase value to our stakeholders, which include our bankers,” he said.

Asides the bank loans, the telecom is also indebted to IHS Nigeria, a Telecom infrastructure company.

It should be recalled that in 2014, the World Bank offered the IHS international a $200m loan to acquire about 2,100 tower sites from Etisalat Nigeria. Under the agreement (Master Lease Agreement), Etisalat sold its tower assets to the IHS, while the IHS will lease it back in exchange for lease rentals.

The deal is secured on an $800m bond, which is partly securitised from the cash flows of the Etisalat lease.

In a statement released by the HIS Nigeria on the deal and relationship with Etisalat Nigeria, “we do experience volatility in terms of timing of settlement of invoices with certain customers. We have a strong relationship with Etisalat and it has continued to make some payments under our Master Lease Agreement.


“As of December 31, 2016, $8.5m was more than 120 days overdue from Etisalat. This amount represents less than 2.5 per cent of the expected proforma full-year combined revenue of the group for 2016,” the statement noted.

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