Econet Wireless Seeks $3.1bn In Damages From Bharti Airtel

Econet Wireless is seeking at least $3.1 billion in damages from Bharti Airtel in a dispute over ownership of its subsidiary Airtel Nigeria, according to a suit filed on Wednesday.

The move follows a Nigerian court ruling on January 30 that Bharti Airtel's ownership of its subsidiary Airtel Nigeria is "null and void" because co-founder and 5 percent shareholder Econet was not consulted on the transfer.

South Africa-based Econet Wireless is disputing the Indian company's ownership of one of its top Africa operations.

Bharti said last month that its stake in its Nigerian unit was "completely safe" and that the world's fifth-biggest mobile phone carrier by subscribers had appealed against the verdict.

"The claim for damages and equitable compensation against the Applicant and some of the Respondents might be in excess of $3 Billion," the document filed to the court said.

"The above estimated damages might also be in addition to a claim for $100 Million received by the Applicant as fees for the management of VNL (Vee Networks Limited, a former name of Airtel) for a period of 6 years which sum should have accrued."

Bharti Airtel inherited the legal case as part of a $9 billion acquisition of Zain's Africa operations in 2010, including 65 percent of Zain Nigeria.

The basis of Econet's claim is that its 5 percent stake was unfairly cancelled when Zain took control, so any decision made since then without it, including the transfer to Bharti, is void. The Nigerian court upheld that claim.

Nigeria contributes about 9.5 percent to Bharti's consolidated operational profits, the company says.

Econet disputed the buyout of Airtel's stake from Zain Nigeria in 2010 because its right of first refusal over the stake was denied, in a dispute that had been ongoing since 2003, when the same assets were first sold to Vee Networks.

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Stock Market Down By 0.9%, After 2-Day Gain

Equity trading on the floor of the Nigerian Stock Exchange went southward yesterday after a consecutive two-day gains occasioned by heavy trading in the shares of some blue chip companies, as the market went down by a cumulative value of N57 billion or 0.9 per cent.

Besides the low appetite for stocks in the days trading, UBA Plc buoyed activity in the total sector in the market by a total of 62 per cent. The bank recorded volume transaction of 186 million ordinary shares valued at N398 million done by investors in 453 deals.

The total trading from the entire subsector in the day stood at 490 ordinary shares worth N2.5 billion and swapped by investors in 4,472 deals.

Other financial institutions that recorded huge volume trading include First Bank with 53.7 million shares and Mutual Benefit which buoyed the insurance subsector that recorded a cumulative transaction value of 26.7 million shares worth N15.3 million done in 162 deals.

A further review of activities in the day showed that 24 companies appreciated in price, compared to 17 that constituted the losers' chart.

The All-share index depreciated by 178.9 basis points or 0.9 per cent from 20,492.31 to 20,313.36 while market capitalisation shed weight by N54billion from N6,458trillion to N6,401trillion.

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Naira climbs as dollar sales outweigh inflation

The naira climbed against the dollar, erasing earlier losses, as oil industry dollar sales outweighed speculation that a rise in the inflation rate would weigh on the local currency.

The local curreny strengthened as much as 0.8 per cent and traded up 0.2 per cent at N157.2975 in Lagos, after losing as much as 0.7 per cent, according to data compiled by Bloomberg.

"The appreciation is due to dollar sales by oil companies and the low demand for the US currency," Sewa Wusa, a currency analyst at Lagos-based Sterling Capital Ltd., said by phone. "However, as a rule, an economy with consistent higher inflation stands the risk of a weak currency, which raises concern for the naira."

The Central Bank of Nigeria (CBN) offers dollars at twice-weekly auctions and interbank trading to maintain exchange rate stability. The oil industry is the second major source of dollar supplies in the country.

The yearly inflation rate in Nigeria jumped to 12.6 per cent in January from 10.3 per cent monthly earlier, the National Bureau of Statistics said Monday. It has increased from 9.3 per cent in August, the lowest since May 2008. The Central Bank maintained its benchmark interest rate at a record 12 per cent for a second consecutive meeting January 31 to curb inflation after the government partially removed fuel subsidies, resulting in higher gasoline costs.

The inflation outlook will be impacted by fiscal injections, the partial deregulation of petrol price and new tariff regimes on certain food imports, Governor Lamido Sanusi said January 31.

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Oil price highest for nine months

The price of oil has reached its highest level since May last year as concerns mount over Iran's nuclear programme.

Benchmark US light crude rose by $1.67 to $105.27 a barrel and Brent crude futures rose 44 cents to $120.49.

It marks the second day in a row of rises after Iran announced on Sunday oil export bans on the UK and France.

The European Union banned Iran's oil imports from 1 July over fears it is developing nuclear weapons.

The EU wants to stem Iran's oil revenues as part of sanctions which will restrict its ambitions to develop a nuclear capability.

However Tehran has dismissed the claims, insisting that it is using its nuclear plans to produce electricity.

Although Iran exports almost no oil supplies to the UK and France, it is retaliating against the planned sanctions and is expected to extend the ban to other European states who buy more of its oil.

Ian Taylor, chief executive of the world's largest oil trader Vitol, said a decline in the value of the euro against the US dollar had also raised the cost of oil sales to EU countries.

"The Iranians now want the price as high as possible as they've got less volumes to sell," he said.

"I reckon they are probably quite close to winning based on the numbers. The politicians are all avoiding the subject at the moment but... oil is extremely expensive, especially in euros."

He added that a price fall was unlikely. "My problem is I can't see what will bring it down... I just can't see enough pressure points to the downside."

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Shell: Nigeria can produce 4M barrels of oil a day

LAGOS, Nigeria. Nigeria could produce as much as 4 million barrels of oil a day, but production remains held back by chronic problems with the nation's government and the rampant theft of crude from pipelines, a top official with Royal Dutch Shell PLC said Tuesday.

The speech Tuesday by Shell executive vice president Ian Craig at an oil and gas conference in Nigeria's capital Abuja renews long-running complaints by the multinational firm in Nigeria, where it remains the dominant oil company.

Craig also said that as much as 150,000 barrels of crude a day is being stolen by oil thieves in the Niger Delta despite an amnesty deal for militants there.

"The militancy which crippled onshore production from 2005 to 2009 has abated, but staggering levels of theft and criminality prevail," Craig said in remarks provided to The Associated Press by Shell.

Nigeria, an OPEC member, now pumps out about 2.4 million barrels of oil a day, making it Africa's biggest producer. Production dropped drastically during the militant attacks that targeted pipelines and saw foreign workers kidnapped. A 2009 government-sponsored amnesty program saw many fighters lay down their arms and the violence largely stop.

However, in place of attacks, thefts from pipelines grew drastically, Craig said. 

The thefts, known locally as bunkering, see thieves using hacksaws and drills to cut into pipelines, where they attach their own spigots to steal the crude. That crude later gets sold into the black market or cooked into crude gasoline or diesel at makeshift refineries that dot the Niger Delta, a maze of creeks and swamps about the size of Portugal.

On one pipeline recently depressurized, Shell found more than "50 bunkering points ... and associated industrial scale illegal refining with major environmental impacts," Craig said.

"The greatest challenge ... is the massive organized oil theft business and the criminality and corruption which it fosters," he said.

The bunkering likely continues because those in power in Nigeria personally benefit from the theft. A U.S. diplomatic cable leaked last year quoted a Nigerian official as saying that politicians, retired admirals and generals and the country's elite all took part.

Meanwhile, Craig said production remains low as the government provides "chronic underfunding" of projects through the state-run Nigerian National Petroleum Corp. That company partners with foreign oil firms working in the nation and remains embroiled in corruption allegations as it has a largely opaque budget. It has delayed payments for projects in the past.

Despite decades as an oil-producing country, Nigeria has a largely impoverished population — especially in the delta, where pollution remains a huge problem. Anger over that has fueled the region's militancy which remains strong today.

Many activists blame Shell for indirectly fueling the government corruption while allowing the delta to remain polluted. Some environmentalists say as much as 550 million gallons (2.1 billion liters) of oil poured into the delta during Shell's roughly 50 years of production in Nigeria — a rate roughly comparable to one Exxon Valdez disaster per year. In recent years, Shell has blamed much of the pollution on those stealing crude from its pipelines and militant attacks.

Craig's speech Tuesday did not mention the firm's oil spill at its offshore Bonga facility last year, the worst in Nigeria in more than a decade. That spill saw roughly 40,000 barrels of oil — or 1.68 million gallons (6.36 million liters) — pour into the Atlantic Ocean.

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New oil found off the coasts of Liberia and Sierra Leone

Oil has been found off the coasts of Liberia and Sierra Leone, energy companies have announced.

African Petroleum and Anadarko say further tests are needed to see how commercially viable the finds are.

Nevertheless, hopes have been raised that an oil bonanza could spur growth in the West African states - still recovering from civil wars.

Drillers rushed to the region five years ago when one of Africa's biggest oil fields was discovered off Ghana.

Liberia and Sierra Leone have been eager to develop their mining and energy industries after years of conflict hindered investment and left infrastructure in ruins.

The government of Sierra Leone issued a statement congratulating Anadarko.

This is the second oil field Andarko has found off Sierra Leone.

Liberia has also welcomed the latest discovery - but urged patience.

"It will take time to fully appraise this discovery," Liberia National Oil company head Randolph McClain said on local radio, according to Reuters news agency.

"And years - between five to seven years - before a drop of oil is produced from the well."

Further west, Nigeria is Africa's biggest oil producer.

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Social messaging apps 'lost networks $13.9bn in 2011'

Social messaging applications cost mobile network operators $13.9bn (£8.8bn) in lost SMS revenue last year, a report has claimed.

Analysis firm Ovum studied global use of popular services like Whatsapp, Blackberry Messenger and Facebook chat.

It concluded that mobile operators must "work together to face the challenge from major internet players".

Industry experts say operators can offset any losses through effective costing plans by mobile networks.

The report gathered usage statistics from the leading social messaging applications typically used on smartphones across the world.

As well as well-known names from popular social networks in the Western world, the study also included apps such as MXit - a massively popular program used mainly in South Africa.

Social messaging apps make use of a smartphone's internet connection to send messages rather than the usually far costlier SMS - short message service - system.

However, the study did not factor in the extra income networks received from mobile data costs because of increased internet usage resulting from social messaging.

The research's author, Neha Dharia, said operators must look to work closely with the big players in social messaging.

"Operators must remain open to partnering with app developers, sharing end-user data with them and allowing integration with the user's social connections," she said.

"Working closely with handset vendors will also be important; they control some of the most popular social messaging apps, and can also provide preloaded applications."

James Barford, a mobile analyst for Enders, said while the figures seemed huge, social messaging still only represented a tiny part of overall mobile communication.

"It isn't a huge amount of the global industry," Mr Barford told the BBC.

"A lot of those people using those types of apps are using them to avoid international messaging.

"Sometimes they are avoiding costs that they wouldn't have paid anyway - maybe in the replacement of email or some other method of communication."

Mr Barford added that a study conducted in April 2011 by research firm Comscore suggested that 4% of UK smartphone users had sent a message on Whatsapp that month.

Another survey, carried out in June 2011 by YouGov, showed that the huge majority of smartphone users - 81% - still considered SMS the key way to send messages on a mobile.

"I think it's a growing threat which is manageable through the right tariffs and the right costing," Mr Barford added.

"People are still using the mobile networks to communicate - and they're willing to pay for that."

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NCC seals up two mobile phone firms in Lagos

The Nigerian Communications Commission (NCC) at the weekend sealed off two mobile phone companies- Ken Xin Da and G- Tide Mobile in Lagos, over failure to submit their mobile phone models for type approval before selling to consumers.

Head of Media and Public Relations, Nigeria Communications Commission, Reuben Muoka disclosed that the two mobile companies had been importing and selling mobile phones that were not approved by the regulatory body, saying using substandard phones had serious implications in the network as they depreciate it and also contributed to the poor quality of service in the country.

He disclosed that the two mobile companies had several models of mobile phones which were not approved by the commission, adding that before any equipment is install in the network, it must be approved by the NCC and that Nigeria only has one network and all the equipment are connected.

The Head of enforcement, NCC Efosa Idehen who led the excise disclosed that the commission saw a lot of adverts on the pages of newspapers last year on mobile phones that were being imported and sold in the country, adding that as the regulator of the industry, NCC looked at the addresses of the mobile companies which include KenXinDa and G-Tide, and invited the them for a meeting, but none of them show up.

He explained that a public notice was put up to warn the companies to desist from selling phones that were not approved in Nigeria, saying after the notice expired since December 2011, the commission decided to give them more time to come around and submit their equipment for type approval, but they did not come.

“Today we are enforcing against Ken Xin Da and G-Tide, we would follow through the others. They are about seven of them that we have en-marked for this type of activity. We will continue to pursue them until we ride our society off phones that are not approved,” he said.

The Head of enforcement pointed out that the fact that phones were not type approved did not make them substandard, but most of them could be, explaining that if they were not substandard, the mobile companies would have submitted them for approval.

He said the aim of the enforcement excise was to make the companies do the right thing, that before phones are brought into the market they must be type approved, saying the market is lager to accommodate everybody but they must do what the NCC said that was good for the country’s network.

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