Capcom, the supposed owner of Starcomms, MultiLinks and MTS First Wireless, may lose its certificate of approval in principle granted it by the Nigerian Communications Commission (NCC) to operate as a telecoms company, if there is further delay in concluding the acquisition of the merged three Code Division Multiple Access (CDMA) operators.
Capcom had in 2012, announced the acquisition of Starcomms, in addition to MultiLinks, and MTS First Wireless, that it had earlier acquired. The plans then were to merge the three operators into one big and strong CDMA operator called Capcom.
Although the core investors that acquired the three CDMA operators tried working according to plans, but somewhere along the line, it had commercial hitches with Starcomms in the process of acquiring it, a situation that made it difficult for Capcom to continue with the transaction process.
The Executive Vice-Chairman of NCC, Dr. Eugene Juwah, who confirmed the commercial hitches between Starcomms and Capcom, told THISDAY that although NCC gave Capcom approval in principle to acquire the three CDMA operators and operate as a CDMA operator, it would not hesitate to withdraw it and give it to another operator that has interest and proof of financial capacity to run the telecoms companies.
According to Juwah: 'NCC has the mandate as a regulator to withdraw the approval in principle, if it discovers that Capcom can no longer conclude the transaction it started since 2012 to acquire Starcomms and merge it with MultiLinks and MTS First Wireless.'
This means that any other company that wants to invest in the three companies will be given an approval in principle, and will later be given the final approval, if there are signs of progress and conclusiveness in the entire process, Juwah added. 'We are yet to give Capcom ultimatum on a specific number of weeks or months to complete the transaction of acquiring the three CDMA operators, but if after some time we are convinced that they cannot go further, we will issue them ultimatum on the length of period we will want them to conclude the transaction, and if they fail to meet up, then we will have no other choice than to withdraw the approval in principle that was given to Capcom,' Juwah said.
Speaking of the courage displayed by Capcom in acquiring the three CDMA operators, Juwah said the core investors bought the CDMA companies at a time when the companies were having serious challenges, such that it was practically impossible for them to expand their businesses at that time. Some of the CDMA companies bought were near collapse but Capcom came with a true spirit to turn around the companies.
In the process of turning around the three CDMA companies, they discovered some commercial hitches that had slowed down the planned takeoff of Capcom, and they are still trying to sort things out with the initial owners of the companies, Juwah explained.
He said: 'As a regulator, we feel like stepping into the matter, but by law, we cannot interfere in the matter, because it is strictly a commercial dispute between the lead company, which is Starcomms, and the new owners, which is Capcom. Since we do not have the mandate to interfere in such issues, we are waiting for them to resolve it amicably within themselves and give us their next line of action as to whether they are going ahead with the merger or they are pulling out of the entire arrangement of acquiring the three CDMA companies.'
Juwah however said NCC would not be able to wait forever as a regulator, but would take its own decision on the matter soon.
'If we are certain that Capcom cannot continue with the transaction, then we as a regulator, will be willing to give licence to any other interested company that has the capacity to buy the companies and run them effectively,' Juwah said. He added that the primary mandate of NCC was to ensure that no transaction process of acquiring other telecoms companies should distort healthy competition in the industry.
'If we see that it will not affect competition and the new operator that plans to acquire other operators is not owing us, then we will accept it and give approval in principle, like we did to Capcom. What Capcom has from NCC is approval in principle and not a final approval to operate,' he added.
Following the weak financial status of Starcomms, the telecoms company reached an agreement with Capcom to invest $200 million in Starcomms to acquire it.
By Emma Okonji