MTN Nigeria has officially liquidated Visafone, marking the end of an era for the country’s last-standing Code Division Multiple Access (CDMA) network. The telecom giant recognized a significant loss of ₦30.3 billion (approximately $18 million) from its 2016 acquisition of Visafone, as disclosed in its H1 2024 financial statement.
“Following the absorption by MTN Nigeria, Visafone is now fully liquidated,” the company stated. “The liquidation process was completed during the period, and all remaining assets and liabilities of Visafone have been transferred.”
The Strategic Acquisition and Its Challenges
When MTN Nigeria acquired Visafone from Jim Ovia in 2016, the primary goal was to enhance its broadband internet services by leveraging Visafone’s valuable 800MHz spectrum licenses. These licenses were seen as critical to delivering 4G LTE services, which would provide faster internet speeds and better connectivity for MTN’s subscribers. At the time of acquisition, Visafone had a subscriber base of 2.2 million, making it a strategically significant move for MTN.
However, the acquisition was not without its challenges. The transfer of Visafone’s spectrum licenses became a contentious issue, facing resistance from both the Nigerian Communications Commission (NCC) and MTN’s competitors. Rivals like Airtel and 9mobile raised concerns that the acquisition would give MTN an unfair advantage, increasing its spectrum share from 38% to 50%. These objections led to a three-year delay in the full transfer of the spectrum, with MTN even considering pulling out of the deal at one point.
Despite these hurdles, the acquisition was crucial for MTN to remain competitive in the Nigerian market, especially against Globacom, which launched its 4G LTE services in October 2016. The ability to offer superior 4G services was seen as essential for maintaining MTN’s market dominance.
Financial Implications and Historical Context
The financial implications of the Visafone acquisition have been significant for MTN Nigeria. Although the exact terms of the acquisition were not disclosed at the time, the recent filing reveals that MTN invested ₦43 billion in the deal. The ₦30.3 billion loss now recognized reflects the challenges and delays that plagued the acquisition and integration of Visafone into MTN’s operations.
This is not the first time MTN has acquired a spectrum license holder in Nigeria. In 2006, the company purchased VGC Communications Limited (VGCCL) for $70 million (₦9.3 billion at the time). VGCCL was licensed by the NCC to provide cabling and radio telephone services nationwide, further strengthening MTN’s position in the Nigerian telecommunications market.
With the liquidation of Visafone now complete, MTN can fully integrate the assets and spectrum into its operations, albeit at a considerable financial loss. The completion of this process underscores the complex regulatory and competitive landscape in Nigeria’s telecom sector, where strategic acquisitions are often fraught with challenges.
As of now, MTN Nigeria has not provided additional comments on the liquidation or the future plans for the spectrum assets acquired from Visafone. However, the company remains a dominant player in Nigeria’s telecom market, and this latest development is likely a strategic move to consolidate its position in the rapidly evolving digital economy.
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