The Mobile Telephone Networks (MTN) Group Limited, the biggest telecommunications operator in Nigeria by market share, has begun the process of acquiring Visafone Communications Limited, in a strategic move to strengthen its foothold on Nigeria’s burgeoning internet market.
Two sources conversant with the development told Bloomberg that the deal was within radar as the telecoms market enters a crucial stage of growth.
This acquisition move by South Africa based MTN, with about 60 million subscribers on its Nigeria network, does not come as a surprise to industry observers.
According to them, telcos in the country were all honing innovative strategies to meet the ever-growing demands of data-hungry consumers, after riding the famed crest of the mobile phone explosion of the last decade.
Experts say the attraction is Visafone’s strength in the delivery of data service, which is second to none.
BusinessDay gathered that Zenith Bank and Guaranty Trust Bank (GTBank), two of the country’s leading Point of Sale (PoS) acquirers, run on Visafone’s superior data and internet network.
According to Pyramid Research, in a recent industry study, the Nigeria’s vibrant telecoms market would grow at a Compound Annual Growth Rate (CAGR) of 2 percent over the next five years, with mobile data increasing at 16 percent up till 2019.
In view of this, MTN has been exploring acquisitions as it seeks to boost revenue from data outside South Africa, where Vodacom Group Limited has more subscribers.
Johannesburg-based MTN had 59.9 million subscribers in Nigeria, at the end of 2014, more than a quarter of its 223 million across 22 countries.
Visafone had about 2.2 million customers as of December, according to data compiled by the Nigerian Communications Commission (NCC.
“We will send a holding statement at the appropriate time,” Funmilayo Onajide, general manager, corporate affairs for MTN’s Nigerian unit in Lagos, said in a text message on Thursday.
Newsverge, a Nigerian news website, earlier reported the deal. Lagos-based Visafone Communications is a Code Division Multiple Access (CDMA) operator/wireless network provider founded in 2007 by Jim Ovia, a Nigerian businessman who also started Zenith Bank Plc.
But these are not the best of times for CDMA networks in Nigeria, as many of them are already extinct. Only Visafone Communications and perhaps Multilinks still have limited visibility in the country’s mobile market in the voice and data services segment.
Data from the NCC also reveals that the CDMA operators (Multi-Links and Visafone) had a joint total of 153,798 internet users on their networks in January.
It showed however, that the only surviving two CDMA networks in the country listed a loss of 526 internet subscribers in the month under review from the 154,324 users they recorded in December.
The data stated further that Visafone recorded a decrease of 311 customers surfing the internet in January to 153,059 from 153,370 users in the month of December.
It explained that Multi-Links had 739 internet users in January, but lost 215 customers from the December record of 954 users.
While the GSM operators have been increasing their footprints within the voice and data market sphere, the CDMA operations in both segments have been receding over the time. So far, CDMA networks such as EMIS, Zoommobile, Starcomms, Intercellular, Independent Telephone Network (ITN), Bourdex, Prestel and MTS First Wireless have closed shop.
Ben Uzor
