Report has it that Nigerian Communications Commission (NCC) has begun the process for the transfer of the license of Visafone Communications Limited to the new owner and digital mobile operator, MTN Nigeria Communications Limited. This will also involve the transfer of Visafone’s frequencies to the new owner.
According to a report by the Punch Newspaper, NCC will organise a public forum in Abuja next week.
The journey so far
Visafone Communications had won the Unified Access Services Licence in 2007 and had complied with the terms and conditions given it by the Nigerian Communications Commission (NCC) when it had decided to sell the company to MTN.
Visafone applied for the approval of NCC to enable MTN Nigeria to acquire 100 percent equity of Visafone, by virtue of share transfer agreement, without any request for the unified spectrum licence transfer.
MTN later in 2016, announced that it had completed the acquisition of Visafone, the only surviving Code Division Multiple Access (CDMA) network in Nigeria’s telecommunications industry.
The acquisition was approved by the NCC as required by the law, however, the regulatory agency later made a U-turn and issued a statement clarifying that the transfer of the shares of Visafone to MTN did not automatically mean the transfer of the licence and frequency to the mobile operator.
After completing the transfer, the NCC ordered Visafone to submit a certified true copy of statement of share capital and return of allotment of shares from the Corporate Affairs Commission (CAC), duly filed at the CAC, or an extract from the register of members as well as a certified true copy of particulars of directors or any change therein, duly filed at CAC for record purposes.
Why the sale
The CDMA business was a drain pipe on the financial resources of Visafone. The business is highly capital intensive which requires billions of Naira in capital expenditure to compete with the more popular and profitable GSM business.
Also, the GSM operators with deep pockets, having realised how lucrative this business is, along with its growth prospects have poured in hard cash into advertising and promotions thereby snuffing out the life of what remains for CDMA companies.
What this means for MTN
The acquisition and eventual transfer of frequencies to MTN is expected to provide it with the robust voice and data platform of Visafone and cater for the booming internet population in Nigeria.
According to data from NCC, the CDMA segment commands a meager 0.14% market share. Out of this, Visafone has a total of 30,305 internet subscribers as of April, 2018. MTN could leverage on Visafone’s operations, brand and network infrastructure to further enforce itself as the market leader in the country.
The growth prospect is also very promising according to a research which suggests mobile data will grow at Compound Annual Growth Rate (CAGR) of 16.0 percent, over the 2014-19 period to reach $3.8 billion.
The research also suggests, the top two operators, MTN Nigeria and Airtel Nigeria, which provided fixed-line, mobile and Internet services, accounted for 68.0 percent of overall service revenue in 2014. MTN Group 2017 results show it has 52.3 million subscribers with 57% market share by revenue with 14.1 million active data users in the country.