•Its over N300 million indebtedness to Zenith bank
•The fear of Mike Adenuga
Like the fabled Cheshire cat in Lewis Caroll’s literary classic, Alice in Wonderland, Jim Ovia’s Visafone is vanishing gradually but steadily, beginning with its once exquisite services and extending to its larger than life reputation, till the whole of the grand telecoms enterprise is gone. Interestingly, however, Africa’s biggest mobile operator, MTN, has finally acquired Nigeria’s only surviving Code Division Multiple Access (CDMA) network, Visafone Communications, owned by the banking magnate, Jim Ovia, for an unspecified sum after months of negotiations.
The Nigerian Communications Commission (NCC) accepted the deal in the last quarter of 2015 and has finally received approval from the Federal Government. The NCC has been commended for its role in the successful market consolidation of Visafone by MTN which is the first of its kind in Nigeria’s telecommunications industry.
According to a report, the fear of Globacom, was the number one problem of Visafone. Globacom is the only other operator that has a licence on the 700 MHz spectrum, giving it the ability to do LTE (Long Term Evolution), thus laying the foundation for a reality on broadband. MTN, not wanting to be beaten to the punch on the ability to offer LTE services, opted for Visafone’s 800 MHz spectrum which places the company in an enviable position. Despite being the most suited for broadband and data services, CDMA technology platforms have faced stiff competition from more established rivals like Globacom, Airtel, Etisalat and MTN which control an estimate of 98.07 percent of the market.
The capital intensive CDMA business has adversely affected Visafone, leading to more than N345 million indebtedness to Zenith bank. It has also faced challenges from other data business LTE service providers such as Smile, Swift Nigeria and Spectranet which placed the company on the brink of collapse. The acquisition is in the larger interest of the country and the economy.
