Mahanagar Telephone Nigam Ltd. (MTE)

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Nigeria extends Nitel bid deadline to end-October

Tue Oct 6, 2009 LAGOS, Sept 6 (Reuters) - Nigeria has extended the deadline for expressions of interest in its former telecom monopoly Nitel, which has been struggling to find investors for the last few years.

The Bureau for Public Enterprises (BPE) said on Tuesday it had extended its Aug. 28 deadline following requests by investors for more time to sort out issues with their proposed technical partners. It was the government's first update on the tender since the deadline passed.

"The new deadline is now Oct. 26. Some investors say their partners are from overseas so they need more time to get things done, to get their partners ready," BPE spokesman Joe Anichebe said.

"Because of the delicate nature of the transaction, we need to accommodate their suggestions."

The BPE invited bids in July for a 75 percent stake in Nitel and each of its subsidiaries, which include mobile unit MTEL, the South Atlantic Terminal underwater cable (SAT-3) and analogue cellular phone units STAC and CDMA.

The agency said that 14 potential investors, including the Nigerian arms of South Africa's MTN Group (MTNJ.J) and Emirates Telecommunications Corp (Etisalat) (ETEL.AD), MTNL India (MTNL.BO), a group involving Spain's Telefonica (TEF.MC) and local firm Globacom, had expressed interest.

Nigeria is one of the world's fastest growing markets, adding 7 million new subscribers in the last quarter of 2008 alone and has overtaken South Africa to become the biggest on the continent.

That could make Nitel more attractive to foreign investors, particularly if its mobile unit can be bought at the right price. But the government has struggled to sell Nitel, mainly because of the shambolic state of its fixed line infrastructure.

Its fixed lines have fallen to less than 100,000 from five times that number in 2001 and MTEL subscribers have dropped to a few thousand from over 1 million.

Nigeria ended Nitel's monopoly in 2001 and tried to sell the operator the same year. However, preferred bidders failed to pay the $1.3 billion price tag by the deadline, leaving it in state hands.

Local conglomerate Transcorp (TCNP.LG) later bought a majority state in the firm but the government took back control in June, citing a lack of investment and unpaid debts. ID:nL1639247]

Nigeria came close to selling Nitel in late 2005 to Egypt's Orascom Telecom (ORTEq.L), but the government rejected the $257 million offer as too low. (For more Reuters Africa coverage and to have your say on the top issues, visit: af.reuters.com/ ) (Editing by Randy Fabi and Karen Foster)


http://www.reuters.com/article/rbssTechMediaTelecomNews/idUSL637209620091006