Far from pulling out of Nigeria over the record-setting US$3,9bn fine imposed on it by regulatory authorities in the West African nation, MTN has reportedly gone ahead with the acquisition of network operator Visafone Communications.
Reports out of Nigeria on Thursday say that the Nigerian Communications Commission, the body that imposed the massive fine on MTN for failing to disconnect more than 5m unregistered Sim cards, has approved the acquisition of Visafone.
The deal will give MTN access to lucrative radio frequency spectrum in the 800MHz band that will allow it to build a 4G/LTE network offering widespread coverage, including in outlying areas.
No value has been attached to the transaction.
Visafone, which was founded in 2007 by Nigerian business Jim Ovia, focused on the now-outdated code division multiple access (CDMA) technology that enjoyed some popularity in the last decade. The technology has long since been superseded by GSM-based mobile technologies.
According to reports, Visafone has only 2m customers in Nigeria, giving it just over 1% of the market next to MTN’s more than 40%.
Reports suggest that MTN has let go of 2 000 Visafone employees following completion of the transaction. According to Nigerian publication Leadership, MTN has retained only Visafone’s network transmission team.
The publication said MTN intends migrating Visafone subscribers onto its network.
An MTN group spokesman wasn’t immediately in a position to comment on the developments, but promised to provide further details soon.
MTN’s share price was last seen trading down by more than 6,7%, at below R124/share. However, the overall market was also under heavy selling pressure on Thursday. Peer Vodacom was last seen trading off by 3,7%. — (c) 2015 NewsCentral Media
