7 January 2016

Nigeria: MTN Acquires Visafone, NCC Okays Deal

Photo: Premium Times
MTN Nigeria.

Putting court cases aside, the Nigerian Communications Commission (NCC) has given the final regulatory approval to the acquisition of Visafone Communications Limited, Nigeria's surviving Code Division Multiple Access (CDMA) operator by MTN Nigeria.

The deal which was sanctioned in late December 2015 allows MTN Nigeria to utilise Visafone's 800MHz spectrum to launch fourth generation long term evolution (4GLTE) services.

LEADERSHIP had yesterday in a story titled '2016 ICT: Year of Consolidations, New Licences' reported that "a major mobile GSM operator would acquire a small mobile operator with 4G spectrum any moment from now."

LEADERSHIP had also in April 2015 reported moves by MTN Nigeria to takeover Visafone as it was not sure that Nigerian regulatory authorities would make available Digital Dividend Spectrum for mobile operators in line with the recommendation of the International Telecommunications Union (ITU) by June 17, 2015.

MTN Nigeria's acquisition of Visafone has also led to mass lay off of Visafone staff as the CDMA operator moves to wind down majority of its operations in the country.

Reliable sources said MTN is not taking along the liabilities of the CDMA company.The only categories of staff said to be left are the personnel on the transmission team.

"This is about the third time that we are downsizing. The second one was in 2013. This is the third one which began last year but was only communicated to the affected staff on Tuesday January 5, 2015. Our key personnel are still retained" said a source familiar with the transaction.

A source at MTN Nigeria said it's headquarters in South Africa will fornally issue a statement before the week runs out. The value of the final transactions could also not be established as at press time last night.

The move will give MTN edge over other mobile operators as the first major operator to introduce 4G voice telephony (VoLTE). Visafone is owned by Mr. Jim Ovia, one of Nigeria's leading bankers, and technology investors. He also owns Cyberspace, an Internet Service Provider (ISP).

Visafone was formed in 2007 after acquiring the networks of Cell Communications, Independent Telecommunications Network (ITN) and Bordex Telecoms in Aba, Abia State.

It has however faced increased competition form GSM operators who had huge cash to roll out new services, expand and compete aggressively. The 800MHz frequency band covers 790-862MHz. Together with the 700MHz both are referred to as the Digital Dividend Spectrum by the ITU.

One of the affected workers, who spoke on the condition of anonymity, claimed that the sack came as a surprise to majority of them.

"Though, we learnt that the management would downsize, but later in 2016. It is however, surprising that they are sending majority of us away so early in the year. Though they paid three months severance benefit, but should it be this way.

"Some of us have put in five to 10 years of our lives in keeping the business going, but see what we are getting now. It is well" one of the affected staff said. MTN is seeking to use Visafone's 800MHz spectrum to launch 4GlTE.

Under the plan, over two million existing Visafone subscribers will be migrated onto the MTN Nigeria network, a development that will now enable them use their voice and data services, anywhere where the latter has network coverage.

MTN launched 4GLTE in South Africa in 2013 and since them has been looking at how it could launch the technology in Nigeria. According to NCC's frequency allocation table on the regulator's website, MTN, Glo, Airtel and Etisalat operator on 900MHz and 1800MHz while Visafone, Megatech, Prestel, Lakes, Odu'a Telecom, Sunmail, ICL, Multilinks, LT Mobile, Rainbownet, Intercellular and MOC|ZTE are aloocated 800MHz spectrum bands.

With massive competition from other big operators and regulatory infractions which has affected MTN Nigeria's position in terms of market share and average revenue per user (ARPU), MTN decided to strengthen it's position with the 4G spectrum from Visafone. The move will give MTN edge over other mobile operators as the first major operator to introduce 4G voice telephony (VoLTE). Visafone is owned by Mr. Jim Ovia, one of Nigeria's leading bankers, and technology investors. He also owns Cyberspace, an Internet Service Provider (ISP).

Visafone was formed in 2007 after acquiring the networks of Cell Communications, Independent Telecommunications Network (ITN) and Bordex Telecoms in Aba, Abia State. It has however faced increased competition form GSM operators who had huge cash to roll out new services, expand and compete aggressively. The 800MHz frequency band covers 790-862MHz. Together with the 700MHz both are referred to as the Digital Dividend Spectrum by the ITU.

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