The Visafone chapter has closed for MTN, but not without a hefty price tag. The company has revealed a significant loss following the shutdown of its once-promising subsidiary.
After the recent liquidation of its 2016 acquisition, MTN admits to a loss of $18 million (₦30.3 billion) on Visafone, the last CDMA network in the country.
Following the absorption by MTN Nigeria, Visafone is now fully liquidated. The liquidation process was completed during the period, and all remaining assets and liabilities of Visafone have been transferred.
A note from MTN’s H1 2024 financial statement.
In 2016, when MTN acquired Visafone from Jim Ovia, MTN aimed to improve its broadband internet quality using Visafone’s 800MHz spectrum licenses. This technology would enable MTN to deliver 4G LTE internet services to its subscribers across Africa, especially Nigeria.
The spectrum license made acquiring Visafone, which had over 2.2 million subscribers then, an important and strategic decision for MTN to take. However, MTN almost canceled the acquisition because the Nigerian Communications Commission (NCC) was reluctant to approve the transfer of the spectrum license.
In 2016, the acquisition was important to MTN as its competitor, Globacom had already launched 4G LTE services in October that year. Other competitors, such as Airtel and 9mobile, analyzed and argued that if the spectrum acquisition were successful, MTN Nigeria would control 50% of the total available spectrum in the country.
Although there were no disclosures on the terms of the 2016 Visafone acquisition, filings indicate a ₦43 billion investment from MTN.