According to very recent reports, MTN is considering pulling the plug on the $220m Visafone deal. They are having that conversation because the NCC woke up one day and “ruled” that the broadband spectrum shouldn’t be included in the acquisition deal. Apparently, it will “increase their dominance”
The Nigerian Communications Commission ruled last week that taking control of the spectrum would increase MTN’s dominance in the country, its biggest market. The Johannesburg-based carrier and competitors including Bharti Airtel’s local unit are seeking to expand their Internet coverage in Nigeria as growth in voice services slows.
MTN agreed to pay almost 19bn naira (R822m) for spectrum as part of a government auction in June this year.The NCC ruled in favour of MTN’s purchase of Visafone in December, according to an agreement seen by Bloomberg and signed by the regulator’s legal head, Yetunde Akinloye.
BUT WHY EXACTLY DID MTN WANT TO ACQUIRE VISAFONE IN THE FIRST PLACE…
kindly read this below…
MTN Nigeria, the country’s biggest operator with the 62.5 million connections via its GSM-based network as of Sept.30, is hoping to improve its broadband offering with this month’s acquisition of Visafone. The acquisition of Visafone, which runs Nigeria’s sole remaining CDMA network could mark the end of the US technology in Nigeria’s mobile market.
MTN struck the deal to help further develop its broadband services with a plan to integrate Visafone’s 800 MHz spectrum frequency. Acquiring the spectrum should help accelerate MTN’s launch of 4G LTE services in Nigeria andimprove voice and data services. As part of the deal, Visafone’s subscribers, around two million, will be moved to the MTN Nigeria network.
If their main aim of developing their broadband services is about to be thwarted by the communication commission, I really think they’ll pull out of the deal. But wait a minute, what is it with the NCC and MTN?
The Africa’s largest phone company, had endured a very rough few months in Nigeria, its biggest market. In October 2015, it was hit with a record $5.1 billion fine for failing to disconnect unregistered sim cards. A personnel shake-up followed as the fine also resulted in a historic decline in share price. The company is challenged the fine in court even though the Nigerian government announced a 25% reduction. Despite its troubles in Nigeria, it appeared MTN smootly went on with business in the country, first renewing its license for an additional five years and doubling down on boosting its broadband capacity, a plan which is about to be frustrated.
Recently too, the company was accused of illegally transferring $14Billion out of the country. I mean, is it only MTN?