Nigeria’s telecommunications regulator said tougher financial-health checks on the country’s biggest mobile-phone companies could prevent a repeat of last year’s collapse of debt-laden Etisalat and help stabilize the industry.
While the central bank will do a financial check of the winner of the 9mobile auction, the NCC will be focused on the buyer’s ability to provide a quality service, Danbatta said, “These are all measures we’re putting in place to ensure the survival of 9mobile and prevent a repeat of what happened.”
“Time is of essence, they can only get good value for this company for as long as it has good business.” Gbenga Adebayo, president of the Association of Licensed Telecommunications Operators of Nigeria said in Lagos.
Nigerian companies have suffered since the 2014 oil-price crash triggered an economic contraction and sent corporate earnings plunging.
Rampant inflation reduced consumers’ purchasing power and the central bank’s tightening of capital controls led to a shortage of dollars, which companies need to pay for imported equipment and service foreign-currency loans. The naira has lost more than half its value against the greenback in that period.
Danbatta said: “Etisalat Nigeria would still be here, but for the deterioration of the exchange rate. The NCC will continue to put in place flexible regulations that will ensure the survival of telecommunications companies in the marketplace.”