MTN buys Nigerian internet provider Visafone

By Oludare Mayowa


 

LAGOS  – South African telecoms group MTN has bought Nigerian internet provider Visafone to improve its broadband services in its biggest market, it said on Friday, as the company awaits a ruling on a $3.9 billion Nigerian fine.

MTN Nigeria executive Amina Oyagbola said the acquisition, already completed, would enable Africa’s biggest mobile phone group to roll out new services in the continent’s most populous nation, which is the company’s largest market by sales.

Terms of the acquisition were not outlined in the statement and MTN declined a request for details of the deal. Visafone was not immediately available for comment.

MTN’s expansion in Nigeria comes three months after Nigeria’s telecom regulator fined it $5.2 billion – more than the past two years of the company’s profits – for failing to disconnect unregistered lines, before reducing the penalty by 25 percent last month after pleas for leniency.

The communications minister has said Nigeria does not want MTN “to die” from the fine.

The operator refused to pay the reduced fine, saying in December that it would challenge the penalty in a Lagos court, and is awaiting the ruling.

“The acquisition of Visafone highlights MTN’s commitment to Nigeria,” Oyagbola said in an emailed statement.

“The acquisition … is also reflective of our concerted efforts to deepen the growth and rollout of broadband services across the country,” the statement said.

Visafone had 2.2 million subscribers at the end of 2014, according to the telecoms regulator. MTN has around 60 million subscribers in Nigeria. This has benefits for the growth of the company but so side damage to the employment stats of Nigeria. As reported after the acquisition news, that visafone has already sacked 2000 employees. It was also reported that the only employees retained were those in the personnel and transmission departments.  However, all sacked employees were paid three months’ salaries as severance package.

Despite the acquisition, MTN Nigeria faces grave challenges ahead with the hefty $3.9 billion fine imposed on it by the Nigeria Communications Commission (NCC) still unresolved and looking like the subject of a lengthy legal battle in the courts.

 

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