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.