Regulatory Intervention Saves Etisalat Nigeria

More facts have emerged showing it is regulatory intervention that led to the reconstitution of the board of Etisalat Nigeria. Gutsy Pen For ICT Development, GutsyPen4ICTD, learns that both the banking and telecom sector regulators, the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC), respectively, played a collaborative role in the exercise.

While the CBN, which actually led the process, was more worried that Etisalat has not been able to liquidate its financial obligations to 13 banks led by Access Bank Plc, running into billions of dollars, the NCC is said to be concerned non sector quantities do not take over the telco and, by so doing, exacerbate the poor quality of service challenge the national network is facing.

A director of the apex bank, Dr. Joseph Nnanna was appointed Chairman of the board of the telco.  Other members of the new board include Oluseyi Bickersteth, Ken Igbokwe, Boye Olusanya and Funke Ighodaro.

Boye Olusanya, a one time Acting Chief Executive Officer of Celtel now Airtel Nigeria,  has been confirmed as the Chief Executive Officer and will replace Matthew Willsher, who was CEO until divestment by minority shareholders Mubadala. Funke Ighodaro takes over from Olawole Obasunloye as Chief Finance Officer.

The appointment of a new board at the telco is a function of joint efforts by the CBN and NCC to ensure operations at the telco are not grounded while efforts are coordinated to ensure Etisalat meets its obligations to its creditor banks.  Regarding the chemistry between the two regulators, perhaps, what investment analysts have seen is a closing of ranks rather than a fight.  For example, there were suggestions the NCC should be on the board of the firm, but the regulator did not find this attractive as taking a board position could have a backlash on its regulatory neutrality.

The attention of the regulator was drawn to a report by some media organizations that it is represented on the new board of Etisalat, according to NCC information at the disposal of GutsyPen4ICTD. The information was inked by the Director of Public Affairs at the Commission, Tony Ojobo.

“The Commission, hereby, makes it clear that it is not on the Board of Etisalat. As the regulator of the telecommunications sector, there was a recommendation suggesting that NCC should be on the new board of the company, but the Commission declined. The NCC considered it necessary to bring this to the attention of the general public,”Ojobo said.

However, there are those who believe, the contribution of the NCC is significant considering the throwing up of the CEO Boye Olusanya, for example, who is a trusted and tested hand in telecommunications business, and is believed to possess the midas touch to run the company profitably within the time frame prescribed, giving the input of his colleague members of the board, who equally command intimidating credentials.

The board has a mandate to ensure that Etisalat Nigeria honours fully its obligations to the creditor banks, within six months, which is not intractable, since the business is potentially prosperous and commands a large subscriber base.

So far, the outstanding loan sum to the consortium of banks stands at $227m and N113bn, a total of about $574m representing nearly half of the original loan of $1.2bn. Etisalat has been servicing the loan up till February 2017, when discussions with the banks, regarding the repayment restructuring, began.