MTN Set To Buy Visafone Communications

Telecommunication giant MTN Group
is in talks to buy Nigeria’s Visafone

Communications to solidify its grip in
the South African firm’s most
important market, sources familiar
with the discussions said on Friday.
Wireless-network operator
Visafone was set up eight years ago
to deliver voice and broadband
services through mobile and fixed
telecom platforms after business
tycoon Jim Ovia, who also founded
Zenith Bank, acquired three
operators.
“The deal is done. We’re almost
putting ink to paper,” a source
close to the deal said.
Another source said the talks would
conclude “very soon”.
Both sources did not say how much
MTN would spend on the purchase
and how big a stake in Visafone it
would take up.
MTN spokesman Chris Maroleng
said the company did not comment
on market speculation.
Visafone officials were not
immediately available to confirm
whether the firm was involved in
discussions.
Visafone grew its subscriber base
from 30,000 after the acquisitions
in 2007, to 2.2 million at the end of
2014, data from the telecom’s
regulator showed.
But fixed wireless operators with
CDMA technology platforms most
suited for broadband and data
services have faced stiff
competition from more established
rivals such as India’s Bharti Airtel,
Dubai-based Etisalat and MTN,
hitting the industry’s average
revenue per user (ARPU).
ARPU, a key gauge of telecoms
firms’ competitiveness as well as of
consumer spending trends, has
declined over the past three years
to $5 from $8 as competition
deepens.
MTN had nearly 60 million users in
Nigeria in 2014, about 27 percent
of its entire subscriber base across
22 countries.
Africa’s most populous country is
also the biggest contributor to
MTN’s revenue, providing more
than a third of overall turnover.
MTN shares were down 0.4 percent
at 1200 GMT and are flat so far this
year.