There is speculation that MTN Group is likely to abandon its planned acquisition of CDMA network, Visafone Communications. This was afte...
There is speculation that MTN Group is likely to abandon its planned acquisition of CDMA network, Visafone Communications. This was after Nigeria’s telecommunications industry regulator–Nigerian Communications Commission (NCC)–ruled that broadband spectrum wasn’t included in the deal.
In January 2016, MTN was reported to have finalized its acquisition of Nigeria’s only surviving Code Division Multiple Access (CDMA) network, Visafone. The deal was initially estimated to be worth $220 million. Visafone was the only Nigerian telecom operator to have an 800 MHz spectrum licence which it won in 2007. The broadband licence was said MTN’s major interest in the acquisition deal.
Last week, Executive Vice Chairman/CEO, Prof Garba Umar Dambatta said at a press conference at the Commission’s Headquarters in Abuja, that the NCC only approved the acquisition of 100 percent shares of Visafone. He added that Visafone’s spectrum sale will be brought to the attention of stakeholders when the time comes. Inferring from his statement, the NCC claimed that the 800MHz spectrum which was the main reason for MTN’s initial interest in the deal was not yet acquired by the telecommunication network. The cancellation of the spectrum deal will erode the value of MTN’s initial acquisition.
In February, Etisalat Nigeria brought a legal action against MTN Nigeria and Visafone Ltd., challenging MTN’s use of the 800MHZ spectrum following the acquisition of Visafone. Etisalat had questioned NCC’s basis of approving the spectrum deal and claimed that the use of the 800MHz would further entrench MTN’s dominance in the Nigerian telecommunications sector.
The 800MHz spectrum was expected to provide MTN with the opportunity to launch its fourth-generation Long Term Evolution (4G LTE) service. Globacom is the only other operator that has a 700 MHz spectrum licence. On Tuesday, Globacom launched its 4G LTE service, making the telecommunication carrier the first national carrier launch this service in the country.
Last year, MTN was granted a 15-year licence for a 4G LTE 800MHz spectrum pending the fulfillment of certain requirements. One of the requirements is that MTN Ghana must possess a minimum of 35 percent Ghanaian ownership within 13 months from the licence’s validity date, or otherwise face a reduction of two years in their licence duration, plus an additional year for each year in which the threshold is violated.
MTN has had to deal with an unfavourable business climate in Nigeria recently. In October 2015, the NCC slapped the telecommunication network with a $ 3.4 billion (N1.04 trillion) fine which it later renegotiated to N330 billion. Last week, House of Representatives member, Dino Melaye accused MTN of transferring over $12 billion out of the country between 2006 and 2016.
Source: Ventures Africa
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