By Nse Anthony-Uko with agency report
ABUJA (Sundiata Post) – MTN Group Ltd may discontinue its acquisition of internet provider Visafone Communications as the Nigeria Communications Commission said it cannot acquire the company along with the Spectrum.
Plans by MTN Nigeria to purchase Visafone became public since mid-2015. The deal was approved by the NCC in December 2015, and this year, they started testing their long-awaited 4G LTE service using the 800Mhz spectrum band they acquired from Visafone.
NCC recently decided that broadband spectrum should not be included in the deal, sources two familiar with the matter told Bloomberg.
Sundiata Post gathered that MTN is already integrating the Visafone lines into its own network by registering the owners and capturing them into their own database.
Africa’s biggest wireless carrier by sales is deciding whether acquiring the closely held company is worth it without the spectrum, said one of the people, who asked not to be identified as the deliberations are private. The deal valued Lagos-based Visafone at about $220 million, according to both people.
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 Ltd.’s local unit are seeking to expand their internet coverage in Nigeria as growth in voice services slows. MTN agreed to pay almost N19 billion ($59 million) for spectrum as part of a government auction in June this year.
The NCC ruled in favor 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.
International ratings agency S&P downgraded MTN to junk status on Friday to reflect increased risk in Nigeria, where the phone company agreed to pay a 330 billion naira fine earlier this year for missing a deadline to disconnect unregistered subscribers. Last week, Nigerian lawmakers raised new allegations about the wireless carrier, accusing the company of illegally moving almost $14 billion out of the country. MTN denied the claims.
MTN shares fell 0.8 per cent to 116.53 rand as of 2:02 p.m. in Johannesburg, valuing the company at 215 billion rand. The stock has declined 39 per cent since the Nigeria fine was first reported last October, compared with a 2.8 per cent gain at crosstown rival Vodacom Group Ltd.