Visafone sale to MTN faces regulatory hurdle

Visafone sale to MTN faces regulatory hurdle

Visafone sale to MTN faces regulatory hurdle

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Visafone Communications Limited’s plan to sell the biggest CDMA operator to MTN Group, owners of MTN Nigeria, will have to scale a major regulatory hurdle before the two parties can close the acquisition deal, a key source conversant with the talks has told Technology Times.
Both companies have been in talks to close a deal under which MTN Group, owners of Nigeria’s largest mobile phone company by subscriber numbers, MTN Nigeria, plans to buy Visafone to consolidate its local telecoms market dominance.
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Both companies have been in talks to close a deal under which MTN Group, owners of Nigeria’s largest mobile phone company by subscriber numbers, MTN Nigeria, plans to buy Visafone to consolidate its local telecoms market dominance.
Meanwhile, a source conversant with situations says that an existing dominance declaration on MTN Nigeria, which revealed that the South African mobile phone company holds dominance in key areas to undermine effective competition will pose a key hurdle to the conclusion of sales deal.
“Unless a review of the regulatory determination has been reviewed, MTN will find it difficult to conclude the acquisition transaction with Visafone”, the source told Technology Times anonymously.
That as not yet happened as at yesterday nor has the two parties officially approached NCC, the telecoms industry watchdog, as at Monday, this week, an insider said.

[blockquote right=”pull-right”]“According to the source, to conclude a sale deal, which will involve the transfer of frequency spectrum and other licences issued by the telecoms regulator, parties to the transaction will require regulatory approval.” [/blockquote]

 

According to the source, to conclude a sale deal, which will involve the transfer of frequency spectrum and other licences issued by the telecoms regulator, parties to the transaction will require regulatory approval.
MTN Nigeria and Globacom Limited, two of the biggest players in the telecoms market, have been placed under the regulatory sanctions over allegations they have used their market dominance to compete unfairly in the Nigerian market.
The dominance sanctions came into force from May 1, 2013, when the Nigerian Communications Commission (NCC) reviewed six local telecoms market segments of mobile voice, fixed voice, fixed data, mobile data, upstream segment and downstream segments.
In the report of the study, dated April 25, 2013, Dr Eugene Juwah, the Executive Vice Chairman/CEO of NCC confirmed that the duo of MTN Nigeria and Globacom are dominant operators in key segments of the nation’s telecoms market.
According to him, to determine an operator as a dominant player, the Commission will presume that any Licensee whose gross revenues in a specific communications market exceed forty per cent (40%) of the total gross revenues of all Licensees in that market, is in a dominant position in that market.”
Following the dominance ruling, the regulator decided that MTN Nigeria, held dominant positions in two key segments: mobile voice and upstream with the latter spanning areas like Spectrum, Tower Sites, Network Equipment, Wholesale Broadband/ Internet Access and Wholesale Leased Lines and Transmission Capacity.

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Comment(1)

  1. If Visafone is sold to MTN there is a good chance we can create another monopoly in the phone market and it will be bad for the country.

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