Smile Telecoms Still Wants to Acquire 9Mobile: Would it get a Chance?
The 9Mobile sale process seems to be a never-ending soap opera, with the protagonists gearing up for another round of suspense. In case you are unsure of what we are on about–Smile Communications, the reserve bidder in the 9Mobile sale bid, has just signaled that it is in the best position to take over the telecom company.
Smile had previously attempted to push this stance when it asked regulators to review how Teleology Holdings emerged as the preferred bidder. But as the financial deadline draws so close for Teleology, Smile could have a real chance at acquiring 9Mobile.
As we’ve previously reported, the 9Mobile sale process is still far from complete. The preferred bidder, Teleology, still has to make a non-refundable payment of $50 million before March 13. This is Teleology’s first real test, as a default could blow the process open again with Smile stepping in to show its own financial strength.
Smile is hoping this happens. And has recently stepped up its PR game too.
What Does Smile Have to Offer 9Mobile?
In an interview with This Day newspapers, Smile’s Operations Chief, Mr. Farroukh Ahmad, proudly said that Smile can make 9Mobile competitive again within 90 days. That’s a pretty boastful statement, but he did share some very compelling reasons to support this.
He said Smile’s acquisition of 9Mobile would “bring three dimensional values” to the teleco. First, he shares that Smile would leverage its existing infrastructure and merge it with that of 9Mobile’s.
We will seek permission to flip our existing 800MHZ frequency to 9Mobile to enhance its operations. Without exaggeration, we are sure to add additional 600 Base Transceiver Stations of LTE technology, into the operations of 9Mobile within a space of 90 days. We will from day one, integrate our existing facilities with that of 9Mobile to get the company back to its good old days…
Smile also says it would raise the funds to pay off 9Mobile’s loan by bringing in fresh millions of dollars from foreign financing to payoff its debts. Additionally, Mr. Farroukh explains that Smile’s knowledge of the telecom industry would be beneficial for 9Mobile’s long term growth.
With all these, Smile ought to have a better chance of emerging victorious in the 9Mobile sale. But unfortunately, this may not happen. As it appears powerful forces are behind the bid by Teleology.
Teleology has the “Hidden” Upper Hand
Since the start of January, industry sources have been speculating on the authenticity of Teleology Holdings. Most believe that it is a special vehicle company designed specifically for the 9Mobile bid. Some sources say traditional rulers, politicians and powerful business men are the ones behind the company.
So when it comes to telecom business, Teleology seem to have no experience. Yet, it was already the favourite bidder to own 9Mobile, long before Barclays ever announced them as the preferred bidder.
Smile may only get a chance at acquiring 9Mobile if Teleology fails to raise the nonrefundable fee before the deadline. But that seems unlikely. News sources claim that the company made a $500 million bid ahead of Smile’s $300 million.
So once again, 9Mobile’s sale is the talk of the town. Regulators and the company’s workers are most likely hopeful that whoever emerges successful, would boost the company’s revenue rather than decrease it.