Intercellular Stages comeback move as Telto Group Acquires stakes

Intercellular, one of Nigeria’s  Private Telephony  (PTO) licencees is staging a major comeback, particularly in the burgeoning data segment of the highly competitive telecommunications market, following recent indications that Telto Group, a Middle East investment conglomerate, has secured a 70 percent stake in the company.

Only last year, the Nigerian Communications Commission (NCC), the industry regulator, had declared Intercellular and 12 other telecoms operators inactive.

Intercellular became inactive by virtue of the company’s heavy loss of customers to other operators currently pulling their weight in the telecoms industry. According to a report by the Nigeriancommunicationsweek, an industry blog, the Middle East investment company has eyes fixed on making an entry in Nigeria’s lucrative telecommunications market through the acquisition of stakes in Intercellular. 

Though little is known about the Telto Group, market observers have expressed optimism that the new investors would turn the company around, positioning it for commercial launch and setting the ailing CDMA company on the path of profitability.

But these are not the best of times for PTOs or Code Division Multiple Access (CDMAs) operators who have been plagued by poor funding, stiff competition, ownership structure glitches, license restrictions, as well as consumer preference for GSM technology.

These troubles have sent many of the PTO’s into extinction, while surviving companies remain on life support. 

After the successful deregulation of the telecoms market in 2001, the industry regulator first licensed PTOs to deliver communications services to Nigerians and prospects looked good. Industry observers are of the view that coverage restrictions embedded in their limited mobility licenses, which hitherto looked harmless, finally became their albatross. 

Before 2011, many PTOs like Intercellular, EMIS and ITN among others, had gone under, leaving only four operators struggling for survival in that segment. But the downward trend of PTO business would not cease and would eventually consume the likes of Multi-Links, Zoom and Starcomms, leaving only Visafone.

Experts say that the demise of PTOs was often quickened by corporate mismanagement.

As at January 2015, industry statistics show that while the figure of connected lines on GSM networks had jumped to 138 million, CDMA operators only managed to hold on to two million lines. Clifford Onyeike, deputy general manager, marketing and strategy, Visafone, had earlier said that harsh government policies hindered CDMA operators from deepening network coverage. 

“It is the CDMAs which took the first step to empower the man on the street and not GSM, but When CDMA licences were given by the NCC, they were regional licences. An operator given a licence to cover Enugu only covered Enugu specifically.

It was in 2007 when universal licences were given, that CDMAs were able to broaden their coverage. At that time, GSM had gained ground. We lost about eight years of advancement; GSM prevailed and ruled the luxury market,” Onyeike had lamented. Mohammed Waya, chief technical officer, Intercellular, confirmed the new development, adding that the company would be launching on 4G (Fourth Generation)/Long Term Evolution (LTE) technology which puts Intercellular in better position to deliver high speed broadband services.

According to experts, LTE is the latest standard for wireless communication of high-speed data for phones and data terminals.

The re-launch of the firm slated for December, according to the report, is targeting six cities in the first stage, covering Abuja, Kano, Kaduna, Lagos, Port Harcourt (PH) and Benin. “Our network in these cities will be tested by November, in readiness of the formal roll out by December 2015. Intercellular is launching as a nationwide network operator, but will roll out in these cities first and thereafter extend coverage to other parts of the country,” Waya said. 

According to a statement on the firm’s website, Intercellular is transforming to its business by swapping the existing CDMA network with the latest LTE technology. This move would strengthen the firm’s growth by making high speed services available and affordable to Nigerians. “Our new LTE network will operate on the assigned 800MHz band, and will be operated on multiple phases, until it finally covers all the cities and towns of Nigeria. 

“Our customers will enjoy the high quality of our voice services in addition to the high speed broadband services”, said the statement. Intercellular also promised to apply the highest standards in technology deployment to ensure that its LTE network accommodates high utilisations and customer satisfaction.

Telto Group, according to reports, is not an operator but has investments in telecoms, hospitality, real estate and banking. Recall that in 2007, Sudatel Telecoms and Internet service provider, based in Sudan, bought 70 percent of Intercellular for $50 million. But the promise of fund and expertise injection by Sudatel was never met and the deal fell apart.

Earlier in 2006, a South African firm, Global Vision Telecom (GVT), has invested $137.5 million (N17.8 billion) in Intercellular Nigeria Plc, to acquire the majority stake in the company. GVT is a private firm owned by a Rwandan, Miko Rwayitare, and it is managed by a subsidiary firm, Telecel, which is reputed to have built about 14 telecoms networks across Africa.

Ben Uzor