Telkom SA sells troubled Nigerian CDMA unit to Visafone
South African incumbent fixed-line operator Telkom SA has sold off its CDMA operation at the embattled Nigerian Multi-Links network. The deal, worth $52m, will see the transfer of the network to operator Visafone; Multi-Links’ fibre and fixed-line elements are not included in the sale.
Plans for the sell-off first surfaced in November last year, when Etisalat was rumoured to be interested in buying up the network. Telkom SA had bought a 75 per cent stake in Multi-Links in 2007 at a cost of $280 million, taking full ownership of the company in 2009 with a further investment of $130 million. Since then, the Nigerian operator has proved something of a burden, with Telkom writing down the unit by more than $50m.
Former acting CEO of Telkom, Jeffrey Hedberg, said that the telco was “pleased to announce the successful conclusion of realigning our core business model to focus on our core competencies,” adding that Telkom management viewed the sale as “the best option available to our shareholders and Multi-Links’ customers.”
Visafone chairman and Multi-Links buyer Jim Ovia said that the deal would solidify his company’s place in the Nigerian market.
Visafone launched in 2007 and currently has over 2.5 million subscribers, with a market share of 2.65 per cent. According to Visafone, it passed the one million subscriber mark within six months of its launch; the company claims to have been the fastest growing mobile telco in Nigeria.
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