Following the complete acquisition of Multi-Links by Helios Investment Partners, the new shareholders say they have what it takes to recapture Nigerias CDMA market, writes DAYO OKETOLA.Multi-Links, a leading Code Division Multiple Access telecoms company in Nigeria, now operates under a new ownership following the successful acquisition of the 100 per cent equity interest by Helios Investment Partners from Telkom South Africa, its previous shareholders.Though, HIP is an affiliate of Helios Towers Nigeria, a telecoms infrastructure company which leases tower spaces to wireless service providers, the new Multi-Links owner says it will recapture the Nigerian CDMA market and succeed where Telkom, despite its milestone in the South African telecoms business, failed.This has puzzled industry watchers who believe that HIP lacks the experience to deliver a successful CDMA business, going by its pedigree in telecoms infrastructure building, sale and leaseback.But, the Chairman, Board of Directors, Multi-Links, Mr. Martins Dirks, who unveiled the new Multi-Links in Lagos, notes that the new shareholders are aware of the challenges bedevilling the Nigerian CDMA market, and assures that they are unperturbed and are ready to take calculative steps to retain their subscribers and grow the company.He says, "The CDMA business is challenging and with very active competitors in the market, it is difficult to effect a fast turnaround, but Multi-Links is currently focused on improving its performance through cost efficiency, selective penetration and targeting of medium to high-end customer acquisition and retention."Going down memory lane, Multi-Links is arguably the oldest mobile service provider in Nigeria, having been operating for over 15 years in the country.However, the companys consistent battle with insufficient funding, high operational cost, and the inability to compete with their GSM counterparts, perhaps, attracted the South African telecoms giant, Telkom South Africa, which wanted to extend its footprints to West Africa.Telkom SA subsequently acquired a 75 per cent majority stake in Multi-Links in May 2007. The South African firm further increased its ownership interest in the company to 100 per cent in January 2009, increasing its total acquisition costs to $400m.However, three years of consecutive financial losses, in which Telkom SA claimed to have lost $1bn, led to the decision, in 2010, to wind up its Nigerian operations and sell its assets.The prospect of expanding its subscriber base prompted Visafone, a CDMA operator owned by one of Nigerias foremost bankers, Mr. Jim Ovia, to acquire, in April, 2010, MultiLinksTelkom in a $52m deal.The celebrated acquisition was, however, reversed by an order of the Lagos State High Court, which ruled in favour of Helios Towers Nigeria on the strength of a valid master lease agreement between Multi-Links and the former.In August 2011, HIP entered into a binding agreement with Multi-Links previous shareholders, Telkom to acquire 100 per cent of the equity interest in the Nigerian CDMA operator."This transaction and change in the shareholding of Multi-Links was concluded on 3rd October 2011," Dirk, the Multi-Links chairman says.Dirk, who remains emphatically silent about the total cost of the investment, says HIP is one of the largest Africa-focused private investment firms with assets under its management in excess of $1.9bn, adding that the new shareholders will reposition Multi-Links to deliver quality services.According to him, investors in the various funds include the Commonwealth Development Corporation, International Finance Corporation, African Development Bank, Overseas Private Investment Corporation, a United States Washington based government agency that assists businesses looking to invest abroad and the University of Texas as well as other leading global investment firms, Endowments, Sovereign Wealth Funds and Family Offices. He says the company has decided to retain its operations in 22 service areas where it is sure of a reasonable and loyal customer base while it dropped nine locations off its network operations.According to him, the company is currently upgrading its services in the 22 retained services areas such as Lagos, Port Harcourt, Owerri, Onitsha, Awka, Enugu, Makurdi, Abuja, Jos, Bauchi, Katsina, Kano, Kaduna, Ilorin, Ife, Osogbo, Ibadan, Abeokuta, Sagamu, Ijebu-Ode, Warri and Benin. The nine locations where Muklti-Links services have been wound down, he says, are Asaba, Lafia, Keffi, Zaria, Ogbomosho, Ilesha, Ikorodu, Abijo-Lekki and Sapele.Dirks explains that the company will consolidate on its two major business units, "mobile business utilising CDMA technology with more than one million subscribers and the fibre optic network offering, which offers national transmission capacity and limited metro and last mile connectivity."He also reveals that over $1bn has been invested in the fibre network, thereby increasing the footprint of the network more than sixfold over the last four years.Dirks adds that Multi-Links also invested over $150m in constructing its 8,232 kilometres terrestrial fibre optic network connecting 21 of Nigerias 36 states, as well as the Federal Capital Territory, adding that the company will focus on maximising the fibre optic network which is less than 20 per cent utilised.By and large, Dirks says a new management has been put in place under the leadership of the transition consultant, Mr. Demola Elesho, the Chief Executive Officer.Elesho says the long transition leading to HIPs acquisition of Multi-Links caused uncertainty and damage to the Multi-Links brand as well as resulted in a sharp drop in Multi-Links subscribers base.He says, "Multi-Links is here and ready to serve its customers better. We thank our customers for their loyalty and continued patronage of Multi-Links through a challenging, difficult and uncertain period. We hope that we can continue to count on your support." Elesho, who recalls that less than 20 per cent of the companys fibre optic network is currently utilised today, says Multi-Links has a lot to offer Nigeria in the areas of data service, its core strength from inception.He notes that Multi-Links has decided to maximise its fibre optic asset and sell bandwidth to operators who wish to resell to end users.He says, "Before now, Multi-Links has focused more on the construction and expansion of its terrestrial fibre optic network than on selling capacity on this network to potential customers. Currently Multi-Links terrestrial fibre optic networks business model entails selling bandwidth to carriers and enterprise customers."Elesho, who says the new management will succeed in transforming the company despite the seemingly insurmountable challenges in the CDMA market, argues that Telkom South Africa failed to make a significant mark in the countrys telecoms space because it "tried to be everywhere within a short time, which ordinarily should have been a step after another."He adds that he will not encourage the new shareholders of Multi-Links to be throwing money at the ailing CDMA company just like its previous owners did, adding that calculative steps will be taken to transform the telecoms company.Elesho reiterates that the transition period from Telkom to Multi-Links affected the telecoms firm and led to a bit of churn on the network. The respite, however, is that the network still has a little over a million subscribers which it hopes to build upon, according to him. The Multi-Links CEO says the telecoms industry faces a number of issues such as multiple taxation, multiple regulations by different tiers of government, security, vandalism, poor power supply and inadequate infrastructure. He says these are critical issues which require urgent government intervention.When asked whether investing in Multi-Links at a time of recession in Nigerias CDMA market was a right one, Dirks says the new shareholders are confident that the investment is the right one.Experts, telecoms analysts and industry watchers, however, say that HIPs acquisition of Multi-Links offers a ray of hope to the over one million subscribers on the network. But they also submit that it will be interesting to observe how the new shareholders will transform the fortune of Multi-Links especially going by the poor financial performance of all CDMA operators in the country in the past few years.
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