NITEL In Dire Straights Over Cable Debts
April 2007 | Company Finance AlertNigeria's incumbent fixed-line operator NITEL could be faced with the closure of its link to the SAT-3 undersea fibre-optic cable, due to its spiralling debts. The operator is reported to owe European access provider Cable and Wireless almost NGN500mn (US$4mn) for internet protocol (IP) services. The SAT-3 cable provides international connectivity to most of Nigeria's private telecom operators (PTOs) and internet service providers. In 2001, NITEL paid NGN6bn (around US$50mn) for its stake in the cable, which connects 15 countries in Africa, Europe and Asia. Charging other operators for access to international bandwidth provides NITEL with a valuable source of revenue, but that could come to an end as soon as May 2007 if the operator can not reach an agreement with its creditors.
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