$1.72b Etisalat debt: More telecoms operators face liquidation

The current crisis rocking Etisalat Nigeria, the fourth mobile telecommunications operator in the country, arising from the 1.72 billion dollars about (N541.8 billion) debt it owed a consortium of some foreign and Nigerian banks, including Guaranty Trust Bank, Access Bank and Zenith Bank, may not be limited to the operator alone if feelers emerging from the industry are anything to go by.

According to investigations by the Nigerian Tribune, almost all the operators, including the so-called big four are facing severe cash crunch occasioned by the economic downturn in the country. It was further gathered that the operators were not getting much patronage from their subscribers owing to their dwindling purchasing power which is exacerbated by the biting economic recession.

It was also learnt that the operators were constrained by the rising cost of operations and could not increase their tariffs due to the nature of the industry particularly the role of the regulator who may not be favourably disposed to the idea of any increase in the current tariff structures.

Perhaps, the greatest threat facing the operations of the telecoms operators is the scarcity of Foreign Exchange (FOREX), which has not allowed the operators to import the necessary equipment for their operations in a long time now.

The operators at a meeting with the Nigerian Communications Commission (NCC) in Abuja over the deteriorating Quality of Service (QoS) last week bared their minds on the crippling effect of non-availability of FOREX on their operations and that it was one of the major reasons quality of service had deteriorated to the current abysmal level.

The NCC, led by its Executive Vice Chairman, Professor Umar Garba Danbatta not only assured the operators of its support in this regard, he also disclosed that the Commission had written to the Central Bank of Nigeria (CBN) Governor, Mr Godwin Emefiele and that he was favourably disposed to addressing the FOREX needs of the operators.

Only last weekend, the umbrella body of the operators, the Association of Licensed Telecommunications Operators of Nigeria (ALTON) lamented the challenges being faced by its members in purchasing Foreign Exchange (FOREX) from interbank market to fulfill obligations to Equipment Suppliers and Foreign Vendors.

According to the association, the continued exemption of Telecommunications Equipment and Services from items to be accorded priority in the allocation of FOREX by the CBN has adversely impacted the telecommunications industry in many ways including increase in operating cost, unfavourable credit terms, delayed implementation of network enhancement and improvement Initiatives, among many others.

“In the light of the foregoing, ALTON requests the NCC to fast-track the ongoing engagement with the CBN to include Telecommunications Equipment and Invisibles among the list of items/sectors to be allocated from the 60 per cent FOREX availability by the banks regardless of source of inflows.  This is to ensure the continued provision of world class telecommunications services to the consumers,” a statement from ALTON stated.