From now on, if a company licenced by the Nigerian Communications Commission (NCC), the country’s telecoms regulator, wants to sell a significant stake to a new investor, it may need the regulator’s blessing before the deal can move ahead.
Here’s the context: NCC and the Corporate Affairs Commission (CAC), the body responsible for managing and registering businesses and companies, have introduced a new compliance requirement for communications companies. Under the new rule, any ownership change involving 10% or more of a telecom company’s shares must first receive a Letter of No Objection from the NCC before the transaction can be registered with the CAC.
In English: if someone wants to buy a significant stake in a telecom company, the regulator wants to know about it and approve it first, not after the deal is done.
Could they be any more obvious? While the NCC’s new rule doesn’t mention any specific company or transaction, it comes after major ownership deals in Nigeria’s telecom sector. In February, MTN Group, Africa’s largest telecom operator, announced its interest in the acquisition of IHS towers, the continent’s biggest independent owner and operator of shared communications infrastructure, in a $2.2 billion deal.Â
Under the deal, MTN will control nearly 29,000 telecom towers across Africa. Transactions of that scale naturally attract regulatory attention because they can affect competition and infrastructure ownership.
It’s not an unusual rule: Across Africa, mergers and ownership changes typically require regulatory approval. In Kenya, large transactions face review by the Competition Authority of Kenya, and sometimes, the Competition Tribunal, similar to South Africa. The NCC and CAC’s new rule formalises a similar approach for Nigeria’s telecom sector.
So, if you find yourself wanting to buy or sell over a 10% stake in a telecom company, call your lawyers and stakeholders, but don’t forget the regulator.