A telecom analyst has predicted bleak future for 9Mobile, formerly Etisalat Nigeria, due to its $1.2 billion indebtedness to a consortium of banks.
The analyst, who insisted on anonymity, told Business Journal in Lagos that the huge debt burden will make it practically impossible for the telecom firm to operate optimally, let alone generate sustainable profit going forward.
“The prospect of 9Mobile surviving in the cut-throat Nigerian telecom market is very slim. With a debt burden of such magnitude, the future of the company is doomed. The idea of the company looking for fresh investors is unrealistic because no rational investor will dare dive into the current mess called 9Mobile. Its future is simply bleak.”
He argued that with 13 creditor banks involved in the current ownership structure of the company, the decision-making process has become extremely unwieldy and chaotic.
“Despite the optimism of name change from Etisalat to 9Mobile, the reality is that the company does not have the financial and market capacity to pay back the $1.2 billion loan hanging on its neck in the near term. As a small operator in the market, the possibility of generating sizeable revenue in the short and medium term to offset the facility is doubtful.”
He insisted that the story making the rounds of certain firms lining up to snap up the company is more of public relations than realistic investment commitment.
“Of course, certain corporate names have been bandied about in the media but the truth remains that 9Mobile is not a worthy investment for now.”