China Unicom – the world’s second-largest mobile operator – has confirmed that it is leading a consortium poised to buyout Nitel, the struggling state-controlled Nigerian operator. Despite denying its involvement in a US$2.5 billion bid last week, Unicom confirmed its interest in a short statement made by a London-based subsidiary (China Unicom Europe) yesterday. “Unicom Europe has indicated its interest in the provision of technical and managerial support services in relation to the proposed privatisation,” the statement said. “Unicom Europe has also indicated that, subject to certain conditions being fulfilled, it would be interested in exploring the possibility of equity investment in Nitel”. According to a Financial Times report today, the consortium was named the preferred bidder for Nitel last week after making a US$2.5 billion offer for 75 percent of the firm; this offer was some US$1.5 billion more than the second-highest bid and five times the valuation placed on Nitel by other potential bidders who had studied the company. Other members of the consortium include UAE-based Minerva and GiCell, a small Nigerian telecoms group. Unicom Europe warned, however, that it has not commenced any negotiations with the relevant parties with respect to any “substantive and legally binding agreements.”

The multi-billion dollar price tag has surprised many considering Nitel has been in freefall for several years. Both its fixed-line business and its mobile unit – known as Mtel – have been in decline after an earlier attempt to privatise the operator in 2006 was declared void. Mobile connections at Mtel have dropped from a high of around 1 million five years ago to just a few several thousand today amid a crowded marketplace. The operator has suffered from industrial action, equipment loss and vandalism, a chronic lack of investment and allegations of corruption. The Unicom-led consortium has until Friday to make a 30 percent downpayment on its bid.