Seven years after its majority owner, Etisalat UAE, divested from Nigeria, leaving its former subsidiary with $1.2 billion in debt, 9Mobile has a new owner, a new board, and a chance of a turnaround.
On July 26, a statement from 9Mobile said the Nigerian Communications Commission (NCC) had approved the acquisition of a telecom operator by LH Telecommunications Limited, a little-known Nigerian company registered in April 2023 and led by Thomas Etuh, the founder of the Tak Group of Companies.
While the NCC hasn’t publicly commented on the deal, an NCC official who asked not to be named said the commission was aware of the acquisition, which has been in the works since 2023.
One person knowledgeable about the talks said the acquisition took a year because of corporate infighting after LH took control of 9Mobile in June 2023. The deal represents the latest attempt to restart growth at 9Mobile, the sickman of the telecom industry.
Founded in 2009, 9Mobile started operations as a subsidiary of Emirati-state-owned telecom Etisalat. The company quickly racked up new subscribers as tens of millions of Nigerians bought their first mobile phones and SIM cards during the early 2010s. Government support to drive broadband adoption and a booming economy buoyed by a commodities boom put 9Mobile as a promising contender in Nigeria’s fast-growing mobile market.
But over the last decade, Nigeria has witnessed a reversal in economic fortunes, accelerating inflation and currency devaluation. 9Mobile was impacted due to its significant dollar debt exposure. In 2017, Etisalat divested from the business while a team from the Central Bank of Nigeria and NCC stepped in to find a new owner.
A sale was concluded in 2018, and 9Mobile hired a new CEO, Adrian Woods.
Yet, 9Mobile’s struggles continued. While rival telcos have gained tens of millions of new subscribers, 9Mobile has lost 11.6 million over the decade. The business is struggling to grow, and its reputation among consumers for good quality of service is in tatters as network outages, even in urban locations, have become frequent.
LH’s acquisition offers a new lifeline to the struggling business. It hands control of 9Mobile, Nigeria’s fourth largest telecom company, to LH, which one publication first linked to LH Telecoms UK, a small UK business that reported 11,000 pounds cash on its balance sheet as of January 2023.
LH Telecoms UK did not respond to emails requesting comments.
9mobile’s new owners, LH Telecoms, did not immediately respond to a request for comments.
Following the deal, LH has assembled a competent board of executives, including two highly influential TY Danjuma family members. Between June and November 2023, when Thomas Etuh assumed the position of chairman, the company saw a consistent growth of over 400,000 in subscriber base due to funding released during the period, said one person familiar with the business.
Yet, the acquisition is not without controversy. The takeover by LH Telecommunication was opposed by the former chairman Nasri Ade Bayero claiming the process of naming the new board breached corporate governance ethics, according to one publication and another person with knowledge of the matter.
“The infighting cost 9Mobile a lot. It led to Thomas Etuh freezing funding within the company, which affected their subscriber numbers between December 2023 and January 2024,” the same person claimed. The person said the funding freeze was to force the regulator to approve a sale.
The ascension of Etuh as 9Mobile’s new Chairman will draw questions due to his professional track record and reputation as one of the country’s top debtors. He has an outstanding debt balance of ₦11.58 billion owed by his company Tak Continental Limited, according to Asset Management Corporation of Nigeria (AMCON), the federal agency created after the 2008 financial crisis to handle debt restructuring of shaky businesses.
Etuh previously served as the chairman of the board of directors of Unity Bank Plc, Veritas Kapital Assurance Plc, and Lighthouse Capital Limited. He is also the Notore Chemicals Industries Plc board chairman and Jennifer Etuh Foundation (JEF).
Notore Chemicals, a company listed on the Nigeria Exchange (NGX), recorded a 33% revenue loss year-on-year from ₦32.31 billion in 2022 to ₦21.55 billion in 2023 due to the naira devaluation. Veritas Kapital Assurance, also listed on the NGX, recorded a revenue increase of 41% from ₦5 million in 2022 to ₦7.1 million in 2023.
