Etisalat Nigeria buys local firm with 3G licence...denies interest in Multi-LinksTelkom

The Nigerian arm of UAE-based Etisalat said recently that it had bought a local telecoms firm with a 3G license to help it develop its data and broadband services and compete with other GSM operators. Nigeria is one of the world's fastest growing mobile markets, and Etisalat faces stiff competition from South Africa's MTN Group, India's Bharti Airtel and local rival Globacom, all of which already operate 3G services.

The Gulf's number two telecoms group said the acquisition of Alheri Mobile Services Ltd would enable Etisalat Nigeria to better compete with its main rivals in Africa's most populous nation, home to more than 140 million people. "We are delighted to acquire the 3G license, which is an essential element of our plans for further developing the market for mobile broadband in Nigeria," Chief Executive Steven Evans said. He did not disclose the cash value of the deal. "There is pent-up demand in Nigeria for broadband, and we intend to be the leader in satisfying it," he said.

Etisalat has more than 6 million subscribers in Nigeria and aims to hit the 12 million mark by the end of 2011, but competition is fierce in a market that already has more than 60 million mobile users. Bharti acquired the African telecoms assets of Kuwaiti group Zain in a $9 billion deal in June, giving it access to what it says is the "biggest future continent" for telecoms. A few weeks after rebranding as Airtel across Africa, it announced promotional call rates of 12 naira a minute in Nigeria, half the previous tariff and considerably undercutting its main rivals.

Alheri was owned by billionaire industrialist Aliko Dangote, whose conglomerate Dangote Group has interests ranging from cement and flour to real estate and shipping and who is ranked by Forbes as Nigeria's richest man. It bought the 3G licence about 3 years ago but never made it operational. "It makes sense for us to sell Alheri Mobile to Etisalat Nigeria as we believe that the market here can only sustain four mobile operators in the medium to long term," Alheri Mobile Chief Executive Boye Olusanya said. Proceeds from the sale would be used to develop Alheri's other telecoms assets, he said. In a related development, Etisalat Nigeria has confirmed that it won’t bid for Multi- Links, the loss-making CDMA-technology mobile-phone business owned by Telkom South Africa Ltd., said Chief Executive Officer Steven Evans. “We’re not at all interested in a CDMA business, frankly we don’t see the future in that technology,” he said in a phone interview today. Etisalat Nigeria is 40 percent owned by Emirates Telecom Corp., the United Arab Emirates’ largest phone company. CDMA, or code division multiple access, is the fundamental radio technology used in data phones and networks.

Johannesburg-based Business Report newspaper said recently that Telkom is in talks to sell the mobile phone unit to Etisalat, citing a letter from a Multi-Links executive it didn’t identify. Telkom plans to exit the unit in the next six months, the company said on Nov. 22, at a cost of as much as $180 million. Goldman Sachs Group Inc. “has been appointed by Telkom to look at the different options that they have for Multi-Links,” Evans said. The bank “approached a raft of different people, including Etisalat Nigeria, to talk with us about whether we were interested,” he said.