Chances that NITEL may soon get back on its feet as a result of its sale to Transcorp Plc are increasingly becoming slimmer, as income flow to the company gets slimmer by the months.
Authoritative NITEL source told THISDAY in Lagos that the whole monthly revenue generated by the company is now in the neighbourhood of N300 million, which can hardly support its operations.
The source said Lagos zone, which is the cash cow of the company, has recently been yielding less than N135 million monthly. “If Lagos zone could yield only N135 million, you can be sure that all the other zones combined could not make as much as that,” said a source.
The source said Transcorp has not injected any money into NITEL at the moment and that the company’s engineers have been trying to make do with the same old equipment.
The last strike by workers who shut down the PTO’s building at Saka Tinubu exchange has its other effects as other PTOs have now turned to interconnect clearing houses, specifically ICNL and Medallion to transmit their traffic.
Last November, telephone services to NITEL’s customers in Victoria Island and Ikoyi were disrupted as a result of power fluctuations, which knocked out the Rectifier Unit of the Victoria Island telephone exchange. The standby generator went to work for more than 48 hours until it ran out of fuel after which the redundant batteries took up operations. These too went flat and the telephones lines went dead for the next 48 hours.
This disrupted service to the company’s subscribers in Victoria Island and Ikoyi, where its high networth customers are based. It also affected intra-city calls and trunk telephone services in and out of Lagos.
Another reason the company is making little money, investigations showed is because few operators still rely on it to carry their traffic. Operators now invest in their own transmission cables and VSAT to eliminate their dependence on NITEL. This has further reduced revenue sources for the national operator.
A telecom analyst told THISDAY during the week that NITEL would likely remain in this position till after the elections and even handing over since prospective investors would want to watch from a distance to see what happens to Transcorp after the exit of its major supporter, President Olusegun Obasanjo.
Transcorp has extended the closing date of its IPO from January 31 to February 15, 2007. Although capital market operators say it is a perfectly normal thing to do, other commentators say it may be because the IPO managers fear they may not meet their target.
The analyst said the situation for the company would further worsen if for any reason the elections and change of government are postponed.
According to him, the longer the company stays without the needed capital, the worse its situation gets since competition would take away all its dwindling 400,000 subscribers.
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