- MTN Seeks Exit
- Visafone Workers Protest
- NCC Turns Down Ovia’s Request
Businessman and Chairman of Zenith Bank Plc, Mr. Jim Ovia’s sale of Visafone; a leading Code Division Multiple Access, CDMA operator to South Africa’s telecommunications Giant MTN has hit the rocks following the inability of Ovia to secure the approval of the Nigeria Telecommunications Commission (NCC) to transfer the digital spectrum 800 MGhz to MTN “because a spectrum is a prime national asset which cannot be transferred.”
Sources at NCC and the Presidency confided in The New Diplomat that both Ovia and MTN top guns may have packaged and sealed the deal out rightly selling Visafone without knowing and understanding its implications and intricacies.
Worse hit in the deal is MTN which NCC sources say “may have bought the carcass of Visafone without the engine to power the company
“It’s like buying the carcass of an aircraft without the engine. The aircraft cannot fly because there is no engine to power it”.
He added that a spectrum is a national asset and is not transferable from one entity to another. NCC reasons for turning down Mr. Ovia’s request is that if Ovia decides to pull out of the telecoms business today, the onus is on Mr. Ovia to return the spectrum to NCC, NCC will then calculate the outstanding balance and remittances and refund same to Mr. Ovia.
As it stands, the deal appears to be heading for the rocks because as things stand, NCC will not allow MTN to access the spectrum. But, there might still be a window for Mr. Ovia to operate the spectrum for Visafone if he meets the conditions, but, if he does not, he has no option but to return sales funds to MTN
Top sources at the NCC and the South African Consulate in Lagos confided in The New Diplomat that NCC never at anytime gave outright approval to Mr. Ovia’s request for sale of Visafone to MTN.
According to insiders, by December 31, 2015 when the MTN-Visafone deal was consummated and sealed, the thinking of Mr. Ovia and MTN was that MTN would acquire Visafone totally as an entity but this did not happen as there was no spectrum to boost MTN’s connectivity and operations Investigations reveal that by February 20th this year, MTN, eager to utilize the spectrum to which would make it the dominant player in the industry wrote to NCC seeking permission to allow them use the spectrum. Shockingly, NCC turned down the request citing reason including the fact that the spectrum cannot be transferred.
An angry MTN was said to have reached Mr. Ovia over this sad and unpleasant development. Alarmed, in June, 2016, Mr. Ovia wrote to NCC asking the commission to transfer the spectrum to MTN, again, NCC declined Ovia’s request.
Sources in NCC confided in The New Diplomat that NCC proceeded to further advice both Mr. Ovia and MTN that a spectrum is not transferable and that there was never a time NCC gave an approval for the transfer of the spectrum in the MTN-Visafone deal.
The NCC maintained further that its previous position of transfer of 100% shares of Visafone to MTN is still in place as an ongoing concern.
The New Diplomat gathered from diplomatic sources that when Mr. Ovia wrote NCC requesting for an approval to sell Visafone to MTN, he got NCC’s approval in principle.
But, in packaging the deal, top sources at MTN disclosed that the impression they got was that the transfer of Visafone to MTN would come along with the spectrum 800 Mghz
Diplomatic sources disclosed that MTN’s headquarters is currently seeking to exit the deal as the whole sale is of no benefit to it said an insider
During Jonathan’s administration, anything was possible when Mr. Ovia’s man in Mr. Eugene Juwah was the executive vice chairman. Somebody got three spectrums, he hurriedly return it as soon as Buhari came into office that was N3bn
.Now MTN’s interested in Visafone was neither the staff nor any of its business components but just the spectrum 800 Mghz which would have cancelled the Long Term Evolution (LTE) and boost its operations.
Sources disclosed that currently, Visafone workers are also seeking legal redress asking for about N10bn as compensation from both MTN and Mr. Ovia. Some of the workers who had put in about five years in service were only paid 3 months salaries in lieu of notice and forced to resign.
It would be recalled that Mr. Ovia who was a close ally of former president Goodluck Jonathan had similarly quietly returned controversial digital dividend spectrum 900 Mhz which he acquired for Cyberspace from former President Jonathan to the NCC last year.
Observers believe that the issuance of the spectrum was completely at variance and clear breach of industry practices and procedures. It was issued to Mr. Ovia at a paltry sum of N3bn. High level sources had confided in The New Diplomat that Mr. Ovia returned the spectrum back to NCC believing that the new administration of Buhari might probe the deal. It was gathered that this lead to the collapse of Cyberspace deal with a Chinese firm which packaged as a partnership.
Cyberspace, a fully owned ISP based in Lagos belonging to Ovia covers only Lagos. So, when he (Ovia) acquired spectrum 900Mhz, an action that generated so much public outrage and petitions in the industry, there were genuine concerns In high quarters. The idea was to bring the Chinese firm on board to provide technical capability backing to enable Cyberspace launch nationwide and globally. But, those were some of the grave ethical mistakes committed by President Jonathan. Experts and those who are knowledgeable in the industry believed that the 900Mhz which was handed over to Ovia’s company without public auction or public bidding at a meager sum of N3bn could rake in as much as N100 billion if it is thrown open to public bidding process or public auction” the official said Ovia had quietly returned the spectrum to the NCC as soon as President Buhari assumed office.
The NCC, then under Eugene Juwal (a man believed to have been recommended to Jonathan by Ovia) had accepted the spectrum fearing that Buhari would not tolerate the clear breach of ethics.
The digital dividend enables telecom companies and internet service providers to launch faster mobile broadband services
The spectrum became available after the International Telecoms Union (ITU) directed the broadcast industry to migrate from analogue to digital by June last year. The migration consequently freed part of the electromagnetic spectrum previously used for analogue broadcasting and this spectrum is coveted by telecoms companies world-wide.
Meanwhile, Ovia, Wednesday listed the lack of efficient broadband required for speedy telecommunications service as one of the reasons Visafone was sold to South African telecommunications firm, MTN. He did not however disclose how much the outfit was sold to MTN.
Speaking at the Digital Africa conference and exhibition 2016 organised by Digital Africa Global Consult in Abuja, Ovia stressed that without adequate technology infrastructure to power constant connectivity, Internet of Things (IoTs) would be difficult to achieve.
He said: “We have a lot of devices some of which will be dead equipment. Connectivity is very important and without it, internet of things or internet of everything cannot take place. I wouldn’t say that connectivity is the most important thing, but it is extremely very important.
“In some of this connectivity you need it by way of broadband or by way of fibre optics to give you the broadband or may be a wireless. Or may be the spectrum of between 700-800 MGHz that gives you the broadband speed that you need today, and so you can now understand why Visafone eventually sold its network to MTN.”
According to him, the reason there were so many complaints was the resource availability that Visafone had, which had to do with the broadband, he added.
He said policymakers must ensure that Nigeria is not left behind in the technological development of the future, adding that during the great industrial revolution, Africa was left behind.
Ovia added that the present technology that enables economy to flourish is so pervasive that nobody can be restricted as students can now have access to information like their counterparts in South Africa, Russia and other places in the world.
In his remark, the Minister of Communications Technology, Mr. Adebayo Shittu, who was represented by the Director of Information and Communications Technology (ICT), Mrs. Moni Udorh, said the administration would not fail in using ICT to drive the economy.
The minister said: “We have been doing everything possible in this direction. If we continue on this path, ICT should be contributing between 20 and 30 percent to the country’s Gross Domestic Product (GDP) in few years’ time. We will strive to make it happen.”
