Nigerian President puts Telecom's bid for links on hold

A deal that would see Telecom with business links to Nigeria is on hold.

Acting Nigerian President Goodluck Jonathan has stalled the sale of state-owned telco company Nitel while a new Cabinet is formed.

Telecom's international business, which specialises in selling international voice-calling minutes, is offering technical advice to Brymedia, a consortium bidding for Nitel.

Should Brymedia succeed in its US$551 million ($783 million) bid for Nitel, Telecom New Zealand International would sell international voice minutes to the Nigerian telco.

Telecom's UK country manager, Nicholas Batchelor, said the sale of Nitel provided the "last gateway opportunity" into the Nigerian market.

Nigeria is Africa's most-populous nation, with more than 140 million people and the continent's fastest-growing telecommunications market.

"We look for growth opportunities and we see Nigeria as a growth opportunity," said Batchelor.

Telecom New Zealand International carries around five billion international voice minutes, equating to around 2 per cent of the total market.

Telecom spokesman Ian Bonnar said no ownership stake would be taken by Telecom. In addition to providing the international voice connection, Telecom New Zealand International would offer expertise in undersea cables.

Brymedia has said it would invest US$1 billion in Nitel within 15 months if it wins the bid, including increasing capacity on the underwater fibre-optic cable linking Africa to the world.

A previous deal to sell Nitel in 2006 was annulled.

Since then, Nitel's 500,000 fixed-lines in service have dropped to 45,000, its workforce has declined to 2000 from 12,000 and the company has US$500 million of debt.

- additional reporting: Bloomberg