MTN acquires Jim Ovia's Visafone in bid to boost broadband offering in Nigeria

Jim Ovia, Founder of Visafone and Founder of Zenith Bank

South Africa-based MTN, Africa’s largest mobile phone operator by number of subscribers, on Thursday confirmed it has acquired Nigerian wireless network provider Visafone after months of negotiation.

This deal is seen as part of MTN’s effort to strengthen the company’s high-speed internet offering in Nigeria.

The has been approved by the country’s communications regulator, the Nigerian Communications Commission (NCC).

The NCC fined MTN $5.2 billion in October for failing to cancel non-registered SIM cards. The Nigerian regulator reduced the fine to $3.9 billion in December. MTN is currently challenging this fine in a Nigerian court.

“The acquisition which seeks to leverage resources for service enhancement is also reflective of our concerted efforts to deepen the growth and roll out of broadband services across the country in support of the National Broadband Plan for the benefit of Nigerians,” said Amina Oyagbola, MTN’s Head of Regulatory and Corporate Affairs.

“The acquisition of Visafone highlights MTN’s commitment to Nigeria. More capacity will facilitate enhanced product/service offerings and experience in the data space to the delight of our valued customers. Voice is still king. However, data is becoming increasingly important in our everyday lives and our energies are focused on enhancing data and internet services to the benefit of our customers and the country at large.”

Nigeria currently ranks as one of the fastest growing markets for mobile and data globally. However, the vast majority of data users in Nigeria use 2G and 3G technologies.

The Visafone acquisition enables MTN to utilize Visafone’s spectrum to launch faster fourth generation long-term evolution (4G LTE) services in Nigeria. This deal positions MTN to better capitalize on the estimated 80 percent of data users that will be using LTE by 2019.

Founded by Nigerian billionaire and Zenith Bank Founder Jim Ovia, Visafone was incorporated in Nigeria in June 2007 following the company’s acquisition of Cellcom. In August 2007, the NCC granted Visafone a Unified Access Service (UAS) licence as a telecom operator, allowing the company to offer mobile, fixed and other telecommunications services in Nigeria. Visafone grew its subscriber base from 30,000 in 2007, to 2.2 million at the end of 2014, data from the telecom’s regulator showed. Visafone is currently the largest CDMA operator in Nigeria.

Oyagbola said that MTN was committed to exploring opportunities for meeting its customers’ increasing data needs in line with the company’s vision “to lead the delivery of a bold new digital world to our customers.”

“As we work to maximize our data capabilities towards achieving broadband of international quality, our objective is to ensure that Nigerians experience a boost in the quality of broadband internet services translating to the much needed enhanced data speeds and value to enhance personal and business productivity,” Oyagbola added.

Nigeria is MTN’s largest market by number of subscribers. Nigeria is the biggest contributor to MTN’s revenue, providing more than a third of overall turnover.

MTN’s acquisition of Visafone is another validation of increasing interest in Nigeria by the rest of the world.