MTN shows faith, buys into Nigerian broadband
The MTN Group has agreed to buy internet provider Visafone Communications of Nigeria to expand in Africa’s biggest economy – even as the South African company awaits a local court ruling on a record $3.9 billion (R63 billion) fine in its biggest market.
The acquisition will ensure “Nigerians experience a boost in the quality of broadband internet services” and data speeds, MTN Nigeria executive Amina Oyagbola said in an emailed statement on Friday, without disclosing terms.
Visafone offers voice as well as online services in Nigeria, according to the statement.
On December 17, MTN said it would ask a Lagos court to rule on the fine, imposed by the Nigerian telecommunications regulator for the company’s failure to meet a deadline to disconnect 5.1 million unregistered subscribers. The initial fine of $5.2 billion was reduced by 25% earlier in December, following talks with the regulator led by MTN chairperson Phuthuma Nhleko.
MTN shares have declined by 34% since the fine was made public on October 26, valuing the company at $14.5 billion. On Friday morning, the stock was trading 0.6% higher in Johannesburg, at R127.01.
Lagos-based Visafone is a wireless network provider founded in 2007 by Jim Ovia, a Nigerian businessman who also created Zenith Bank.
MTN had about 62.5 million subscribers in Nigeria at the end of September, almost a quarter of its total of 233 million customers.