NCC may impose operator health checks to avert debt defaults

NCC may impose operator health checks to avert debt defaults

Operators in Nigeria could be hit with sanctions if they are unable to pass financial and technical checks.

The Nigerian Communications Commission (NCC) is considering the proposals as an option to avoid a similar scenario to that of Etisalat Nigeria, which was recently forced to default on $1.2 billion of debt.

Operators would face sanctions if they failed to keep their financial books up to date, or meet certain network benchmarks. In addition, operators would have to prove that they were financially able to apply for network expansion loans.

The NCC’s director of stakeholder management, Sunday Dare, described the Etisalat Nigeria incident as an embarrassing fiasco for the country. The operator was unable to pay back loans that were intended to fund an upgrade and expansion of its network, and was forced to rebrand as 9mobile after its parent firm Etisalat dropped its management agreement with the unit and relinquished its 45% stake in the operator to a trustee.

Had the operator gone bankrupt, the NCC noted that it would have “created a social problem, especially with the jobs of over 2,000 Nigerians on the line”. The regulator even went as far as to suggest that the operator collapsing would have fomented new security challenges in Nigeria.

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