Now they’re talking? Etisalat to invest $1 billion in Nigeria over next two years

by Tolu Orekoya

Even as the contention continues over the fines levied by the Nigerian Communications Commission (NCC) on telecoms companies, it doesn’t seem to hamper the drive to invest in Nigeria and expand their infrastructural network.

The United Arab Emirates’ Etisalat, one of the telecoms companies in the country, announced on May 31 a planned investment of $500 million each year for the next two years in Nigeria.

From Gulf News:

Etisalat Nigeria, the telco 40 per cent owned by UAE-based Emirates Telecommunications Company (Etisalat), is committed to spending $1 billion on its telecoms infrastructure over the next two years, even while it remains at loggerheads with the local regulator over a fine related to poor quality of service, its chief executive said.

“We have invested $2 billion since we entered the market in Nigeria over the past four years, and we are investing another $500 million in infrastructure this year,” Steven Evans told Zawya Dow Jones by telephone on Thursday. “We are going to invest another $500 million next year.”

Earlier this month, Nigeria’s telecoms watchdog, citing the poor service quality of operators, handed down fines to Etisalat Nigeria, India’s Bharti Airtel, local operator Globacom, and South Africa’s MTN.

Evans said Etisalat Nigeria will consult with shareholders over its next course of action after being slapped with a $2.25 million fine. A meeting between the country’s operators in the telecom watchdog on Wednesday proved unfruitful.

“It’s very important for our shareholders, who are investing this money, to feel that the regime as far as quality of services, is very clear and very well documented. Taking into account the challenges we face due to lack of power,” he said.

Besides the UAE’s etisalat, the company’s other major shareholder is Mubadala, an Abu Dhabi government owned investment fund, who holds a 30 per cent stake, said Evans. The rest of the company is controlled by Nigerian investors.

Nigeria’s communications commission is insistent that the operators pay the fines, spokesman Reuben Muoka told Zawya Dow Jones, with a penalty payment of 2.5 million Naira ($15,600) added for everyday the fine remains unsettled.

Etisalat’s subscriber base is over 12 million, and it’s Etisalat Africa arm contributed just under $185 million to the company’s revenue for the first quarter of 2012. The discussions with the telecoms regulations body Nigerian Communications Commission (NCC) is still ongoing with the Etisalat CEO Steve Evans sending an e-mail statement to Reuters on May 30 that read in part:

“On Wednesday, the four operators met the regulator to discuss the issue of the fines imposed by the NCC. Whilst no agreement was reached, the operators reiterated their request that the regulator reviews the KPIs (key performance indicators) used for Quality of Service to ensure KPIs are both relevant for users and that the target values are appropriate for the environment given the challenges operators face in Nigeria.”

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