Teleology Holdings pulls out from 9Mobile, seek shareholding exit

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Reports reaching Naija247news Media that Teleology Holdings, one of the joint investors in 9mobile has pulled out from the 9Mobile acquisition deal.

According to person with the knowledge of the matter, Teleology Holdings which got approval to take over the operations of 9mobile as the preferred bidder, the company has expressed its dissatisfaction over the business relationship with its local partner.

Naija247news earlier in the year reported on the controversial acquisition of 9mobile which has dominated public attention alongside Keystone Bank in a syndicated scandal allegedly involving close allies and relatives of President Muhammadu Buhari.

Teleology acquired 9mobile, known then as Etisalat, in November 2018 — about eight months after it made an initial $500million non-refundable deposit to acquire the telco, and a cumulative 10 months after the takeover was billed to have been finalised.

Etisalat, the fourth of Nigeria’s GSM service providers, began trading as ‘9mobile’ following the financial consequences of defaulting in the servicing of a syndicated loan of $1.2billion owed a consortium of 13 Nigerian banks. In the aftermath, its erstwhile technical partners Etisalat exited the business and requested that the use of the ‘Etisalat’ brand name by the company be discontinued forthwith.

Teleology Holdings, a special purpose vehicle comprising telecom industry veterans and led by Adrian Wood, pioneer Chief Executive Officer of MTN Nigeria, eventually won the final bid — ahead of Airtel, Globacom, Smile, Helios. The Australian, credited with building a very good business model, has remained in the Nigerian business environment since leaving MTN in November 2004.

Teleology Holdings’ successful bid for 9mobile was due largely to the quality of its proposed seven-man management team led by Wood, and was approved by the NCC Technical Evaluation Committee, the 13-member bank lending syndicate as well as the acquisition finance provider, Afreximbank.

However, Naija247news now understands that Teleology Holdings has become increasingly uncomfortable with actions taken outside of the agreed business plan, since takeover, most important of which is how it has been blocked from concluding a management services contract with the local joint venture, Teleology Nigeria Limited. The management services contract would have enabled Teleology Holdings and its team of experts oversee the implementation of the its elaborate business plans including funding proposals — but that so far been impossible.

Reliable sources close tell Naija247news that 9mobile confirmed that Teleology Holdings since last year became increasingly discontented with actions taken outside of the initial agreed business plan drafted since the November 12, 2018 formal take-over of 9mobile.

It was also discovered that Teleology Holdings has been barred from concluding a management services contract with the local joint venture partner, Teleology Nigeria Limited, which would have enabled Teleology Holdings and its team of experts oversee the implementation of the organization’s elaborate business plans including funding proposals for repositioning 9mobile.

But as things are now with the joint acquisition venture, the pull-out by Teleology Holdings further stokes the fire of controversy surrounding 9mobile acquisition.

Wood is understood to have resigned from the boards of Emerging Markets Telecommunication Services (trading as 9mobile) as well as Teleology Nigeria Limited, and has already communicated his current disenchantment with the 9Mobile project to his confidants in Teleology.

“Fifteen Teleology experts have worked since June 2017 on detailed 9mobile turnaround planning, development strategies and financial restructuring,” one quoted him as saying on Monday.

“This included lining up more than US$500 million fresh direct foreign investment from international institutions. 9mobile is an exciting opportunity to build a revolutionary mobile network that could be the pride of Nigeria. Unfortunately, it appears that we will not be able to participate. We now must stand down from further work on the 9mobile project.”

Teleology Holdings Ltd will be seeking to exit its shareholding in the local joint venture Teleology Nigeria Limited, which will be required to change its name. The development may further compound the woes of the struggling 9mobile operation.

In a pre-disconnection notice advertised by the Nigerian Communications Commission (NCC)) on December 18, HIS, the infrastructure services provider which hosts majority of 9mobile’s base stations, was granted permission to disconnect 9mobile and other debtor telecom operators within a 10-day ultimatum, ostensibly on account of 9mobile’s indebtedness. Should this disconnection take place, subscribers on 9mobile’s network would have been effectively shut out completely from the telecommunications network and would be unable to make or receive calls.

9Mobile has been at the receiving end of considerable customer attrition since its financial troubles became public in 2017.

From more than 22million customers in its heyday in October 2016, for instance, the network had just a little over 15million active subscribers in November 2018, according to NCC data, and has consistently lost customers with each passing month.

“Saving the company from a foreclosure together with its implications on job loss and possibly the stability of the larger telecom industry necessitated the intervention of the duo of the CBN and the NCC in what was supposed to be a guided liquidation of the company, but which now increasingly appears to be an imbroglio,” a 9Mobile employee lamented.

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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