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Wednesday, 22 August, 2001, 14:23 GMT 15:23 UK
African telecoms sales on hold
Lagos view
The Nitel privatisation is a central plank of Nigeria's reform plans
Plans to privatise two key African telephone companies, Nigeria's Nitel and South Africa's Telkom, are to be postponed.

Next month's proposed sale of Nitel has fallen another two months behind schedule to allow time for extra information and data to be made available to the bidders.

November's planned flotation of South Africa's Telkom might now be delayed until March of next year.

This is due to the poor business and share price performance of telecoms companies worldwide this year, which has made potential buyers reluctant to make fresh investments in the sector.

More time needed

Nigeria plans to sell a 51% stake in Nitel and issue a new licence for fixed-line services to a second operator later this year.

The target date for completing the sale was September, but the privatisation is already behind schedule after the deadline for potential bidders to express interest was extended by three weeks earlier in the year.

Nigeria's privatisation agency, the Bureau of Public Enterprises, insists more time is needed to clear up - as it puts it - "certain grey areas in order to give investors a better picture about the transaction".

The privatisation of Nitel is the centrepiece of President Olusegun Obasanjo's plans to revive Nigeria's moribund state industries.

The troubled firm has been accused of being one of the biggest impediments to economic development in Africa's most populous country.

Fewer than one in 250 people have access to a fixed-line telephone.

This latest delay will exacerbate a dilemma for the International Monetary Fund.

It recently renewed a standby credit facility for the government, although it is frustrated that the government has missed a series of target dates for the sale of key state assets.

Downturn victim

Meanwhile, in South Africa the planned privatisation of Telkom has fallen victim to the general global downturn in telecom stocks.

South Africa's finance minister, Trevor Manuel
Trevor Manuel: Flotation will take place within months

Finance Minister Trevor Manuel says that although the listing was pencilled in for November, it would be irresponsible to sell a stake in Telkom until market conditions were favourable.

Nonetheless, he claims the opportunities for investment in South Africa's telecommunications industry are far better than in the majority of other developed economies or emerging markets, and that the flotation will take place within a few months.

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 ON THIS STORY
The BBC's Alex Ritson
"The Nitel privatisation is already behind schedule"
See also:

10 Aug 01 | Business
Nigeria kicks off mobile competition
07 Aug 01 | Africa
Mobile use to mushroom in Nigeria
04 Jun 01 | Business
Nigeria doubles phone charges
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