Business

Confusion Grows on Nigerian Telecom Bid

The Chinese telecom had earlier Thursday said it isn’t part of a group bidding for the stake, according to spokeswoman Sophia Tso.

But Usman Gumi, CEO of GiCell Wireless Ltd., said the London office of China Unicom agreed to a technical partnership in the New Generation Consortium and a 20% equity stake in the offer for NITEL.

The comments come after Chigbo Anichebe, head of public communications at Nigeria’s Bureau of Public Enterprises said in a Tuesday statement that an offer by the New Generations Consortium was the highest bid submitted by five companies that participated for a stake in NITEL and its subsidiary, M-TEL. The Nigerian agency said China Unicom was part of the consortium.

“The offer is legitimate, the Hong Kong office must not be well informed,” said GiCell’s Mr. Gumi in an interview Thursday.

Mr. Gumi said that China Unicom “will provide technical and managerial support” to the consortium, while a Dubai-based company, Minerva Group, is the main financial backer.

Calls to the China Unicom office in London weren’t immediately returned. Efforts to contact Minerva Group representatives in Dubai weren’t immediately successful.

Officials from the Nigerian privatization office didn’t respond to requests for comment.

Mr. Gumi said the New Generation Consortium was working with additional strategic partners.

Meanwhile, analysts say that the $2.5 billion bid from the New Generation Consortium is far too high and consider NITEL to be worth around $400 million to $500 million.

Some analysts expressed surprise at the statements of China Unicom’s involvement, saying the company is unlikely to expand overseas as it is being tied up by intensifying competition in its home market, and is expected to focus its resources on its newly launched third-generation mobile operations.

China Unicom’s larger rival, China Mobile Ltd., in contrast, is cash rich and has already made forays into overseas markets. With its parent, China Mobile Communications Corp., it paid $284 million for an 89% stake in Pakistan carrier Paktel Ltd. in 2007.

China Mobile’s parent has reiterated that it is eager to expand into emerging markets.

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