Visafone Communications Limited, the last Code Division Multiple Access (CDMA) network operator in the country has commenced a reshuffling and realignment of its processes preparatory to its final merger with MTN Nigeria.
The exercise, which began late last year, according to a source close to the company, would affect some jobs at Visafone, due to what the source attributed to duplication of responsibilities.
However, despite the expected job loss, New Mail Nigeria Online gathered that quite a lot of the Visafone staff would be retained when the merger process is finalised by the end of the first half of 2016.
Visafone was set up by one of Africa’s richest men and founder and former chief executive officer of Zenith Bank Plc, Jim Ovia.
Despite being the most suited for broadband and data services, CDMA technology platforms have faced stiff competition from more established rivals, the main reason which industry watchers attributed for the decision of the promoters to merge with MTN.
Visafone has also being struggling to compete well in a voice business dominated by GSM networks operated by top-tier firms like Globacom, Airtel and MTN.
Further challenges by data business LTE service providers such as Swift Nigeria, Smile, and Spectranet have placed the company on the brink but analysts are of the opinion that the new deal will lift some of the burden off Visafone’s shoulders, and offer some needed cash injection.
On the MTN part, the South African telco is looking to strengthen its grip on its most important market on the continent by investing in Visafone.
Although details of the deal have not been disclosed by either of the firms, it is believed that MTN is investing in Visafone’s data services in direct response to Globacom’s acquisition of 700 MHz from the Nigerian Communications Commission.
That acquisition gives Globacom the capability to do LTE (Long Term Evolution), which is obviously the next big area, thereby laying the foundation for reality on the broadband.
Globacom is the only other operator that has the licence on the 700 MHz spectrum; hence, it plans to launch LTE services.
So, sensing this scenario, MTN, not wanting to be beaten to the second place in the LTE offering, wants the Visafone licences, that is the 800 MHz and the 700 MHz, the latter which is LTE-compliant, to also quickly latch on them and begin offering LTE in Nigeria.
MTN had bought VGC Communications, the private telephone operator due to its spectrum and the fibre ring it has across Lagos. This was also another proactive move by MTN to prepare itself for landline telephony services, especially as Glo has licence and apparent capability to offer landline telephone service.
In 2006, MTN Nigeria bought VGC Communications Limited (VGCCL) to the tune of $70 million (N9.3 billion).
VGCCL was licensed by the Nigerian Communications Commission (NCC) to provide cabling and radio telephone services nationwide and had laid extensive fibre optic cables, and internet service provision.
The company was established in April 1995 with the primary objective of providing all the communications related services required by the residents of Victoria Garden City and Ikota shopping Complex.
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