Telecoms operators facing M&A for survival, says ATCON President

By Adedeji Fakorede

The President of Association of Telecommunications Operators of Nigeria (ATCON), Engr Olusola Teniola, has hinted of emerging regime of mergers and acquisitions (M&A) that may either come in form of parity mergers or hostile acquisition.

Speaking with journalist at the association  t 2019 Annual General Meeting in Lagos, he said shrinking resources, speed in adoption of latest technology and market share competition have made M&As very necessary for the purpose of remaining in business.

According to him, some will be mergers between two financially strong telecoms operators to present a formidable force in the telecoms sector, while some will be outright acquisition of financially-weak telecoms companies by the stronger ones to avoid business extinction.

Teniola said whichever form it takes does not really matter, “because the end result is about consolidation for better telecoms services delivery. Consolidation is necessary because the telecoms sector is currently passing through a transition phase; with technology disruptors emerging, and riding on the networks of others to achieve success in their business models. So the bottom line is that telecoms operators must consolidate, innovate, and come up with new business models in order to survive the current transition phase.”

However, he was not particularly on the form the expected M&As will take, arguing that “The end result is about consolidation for better telecoms services delivery. Consolidation is necessary because the telecoms sector is currently passing through a transition phase; with technology disruptors emerging, and riding on the networks of others to achieve success in their business models”.

Teniola made it clear that “The bottom line is that telecoms operators must consolidate, innovate, and come up with new business models in order to survive the current transition phase.”

Continuing on Nigeria’s telecoms industry outlook going forward, ATCON President averred that “Data-centric is gradually overtaking voice services, and operators, which initially depended heavily on voice-centric service deliveries, must begin to innovate in the areas of data, and data analytics in order to remain in business, and mergers and acquisition are sure ways to achieve this.”

While brushing aside, the fears that Nigeria’s telecoms sector is facing squeeze which is giving rooms for M&As, he noted argued that “the market is intact, and remains attractive”.

According to him, “The truth is that technology is evolving, and disruptive solutions are equally emerging, which calls for innovative thinking about survivability and business continuity. Consolidation will help the telecoms industry to grow in line with technology transformation and to create more jobs for the country.”

Earlier in his address, Teniola called on the Federal Government to try and provide encouraging investment climate for indigenous players in the industry, noting that “Anyhow you look at it, foreign investors cannot do it alone when local players are shrinking in the industry”.