Telecommunications company, 9mobile, has secured a credit facility to manage and boost its operation in Nigeria. The network provider secured the lifeline from Africa Finance Corporation amidst internal dispute from shareholders and the loss of 3 million subscribers.
9mobile reportedly received a $230 million loan which will be used to service the debt owed by the firm. It will also be used to fund the operational cost of the company.
When 9mobile was still known as Etisalat, it defaulted in the repayment of a syndicated $1.2 billion loan it obtained from a consortium of banks led by Guaranty Trust Bank. Etisalat of the United Arab Emirates, the parent company, pulled out of Nigeria for this reason in 2017 as the banks threatened to take over the firm.
Since then, 9mobile has been struggling to compete against its market rivals like MTN Nigeria, Airtel Africa and Glo. The company has been losing its subscribers to other telecommunications companies. It currently has 9.039 million subscribers, well below MTN Nigeria, Airtel Africa and Glo. In this year alone, 9mobile has lost an average of 1,500 subscribers monthly, with over 3 million subscribers lost in 2 years.
Why this matters: Nairametrics in a report stated that as competition heightened in the telecoms industry, 9mobile would need a strategic push in order to remain relevant and active. The loan from Africa Finance Corporation will help the company to achieve that. The credit facility will also enable 9mobile to afford the necessary drive needed to remain competitive and avoid being obsolete.
Investors’ plight: Afdin Ventures Limited and Dirbia Nigeria Limited – the two major investors in 9mobile, said despite being major investors, they were left out of decision-making, prompting them to seek a refund of their investment estimated at $43,330,950. This has led to a lawsuit and delay of another ownership takeover.
9mobile’s sanction: The company was recently sanctioned by the Nigerian Communications Commission (NCC) for subscribing thirteen numbers on full Do Not Disturb messages (DND) to Value-Added Services (VAS). This, according to NCC, contravenes the regulatory directive, leading to a fine of N5 million.