SA fixed-line operator Telkom has finally dumped the troubled wireless segment of its Nigerian telecommunications provider Multi-Links.
Visafone Communications will buy Multi-Links’s code division multiple access (CDMA) arm for an enterprise value of US$52 million.
“The proceeds for Telkom will be net of the existing liabilities of Multi-Links CDMA business,” the group says in a statement. Telkom has not set out the quantum of those liabilities.
Starcomm, which, along with Visafone, is a player in Nigeria’s CDMA market, was also reportedly in the running to buy Multi-Links’s wireless business.
Telkom will retain Multi-Links’s fibre network and fixed-line operations in Nigeria.
The transaction is still subject to the necessary regulatory approvals.
Visafone is the dominant CDMA player in the Nigerian market and it was born out of the acquisition of three other mobile network operators.
Economic and competitive pressures have weighed on Multi-Links, leading Telkom to fully write down the net asset value of the company.
Multi-Links lost R262m in the six months to 30 September 2010. Revenue fell 9% over the previous six-month period.
“We are pleased to announce the successful conclusion of realigning our business model to focus on our core competencies. Telkom management is of the opinion that the sale of the Multi-Links CDMA business to Visafone represents the best option available to our shareholders and Multi-Links customers,” says former Telkom acting group CEO Jeffrey Hedberg.
Hedberg, who stepped down yesterday as CEO to be replaced by Nombulelo “Pinky” Moholi, continues to advise management until the end of June. — Staff reporter, TechCentral
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