The fate of beleaguered Nigerian state-run telco Nigerian Telecommunications Ltd. (Nitel) was revealed yesterday as the government said it has accepted a $750 million bid from Transcorp, a national conglomerate, in partnership with BT Group plc (NYSE: BT; London: BTA) and Etisalat . (See Transcorp Wins Nitel Bid.)

BT will act as a technical partner to Transcorp, which hold assets in the oil and hotel industries, while United Arab Emirates-based Etisalat joined as a technical and equity partner after withdrawing a separate bid for Nitel.

The consortium beat out five other bidders in what is the government’s fourth attempt to sell off the carrier, which is in desperate need of capital investment. Last month it turned down a $256.5 million offer from Egypt’s Orascom Telecom for 51 percent of the company, saying it was too low. (See Emerging Markets See More Mobile M&A.)

According to local media reports, the consortium will acquire a 75 percent stake in Nitel and must pay the first instalment of $500 million within seven days, followed by the remaining $250 million in 60 days. Previous attempts at a sale failed because the suitors were unable to pony up the cash, and the government is anxious for a done deal. It raised the size of the equity stake on offer from 51 percent to raise more money to help the carrier pay off its large debts -- Nitel staff are reportedly owed several months’ salary.

Transcorp, which plans to IPO in the next few weeks, says it will invest $1 billion in Nitel and its mobile arm, Nigeria Mobile Telecommunicarions Ltd. (M-Tel) , to turn the ailing business around. In a prepared statement, Transcorp chairwoman Ndi Okereke-Onyiukehe said it will "pursue a simultaneous program of internal efficiency and aggressive rollout at NITEL," which "has been under-managed and suffered from under-investment in its network and customer propositions." Nitel provides fixed-line and wireless broadband services to 200,000 subscribers, while Mitel has 1.2 million subscribers.

Although Nigeria is Africa’s fastest growing telecom market, Nitel has suffered from active competition from the likes of MTN Group Ltd. , Globacom Ltd. , and Vmobile (recently acquired by Celtel International B.V. ) because its limited network capacity is no match for the expanding private carriers.

The carrier recently ordered $33 million in CDMA 2000 1x equipment from Motorola Inc. (NYSE: MOT), which its expects to implement within four months and add more than 300,000 new subscribers. (See Moto Wins Nigerian Deal.)

— Nicole Willing, Reporter, Light Reading