Africa's largest mobile network operator MTN has acquired a privately-owned Nigerian fixed-line telecommunications company, VGC Communications.
The Johannesburg-based group is now a 100% equity shareholder of VGC Communications.
VGC Communications is a subsidiary of Modern Communication Technologies, which is registered in Gibraltar and is the communications arm of Globe International Holdings SA.
Funmilayo Omogbenigun, head of corporate communications at MTN, would not comment on the specific value of the deal, but said it stood in the "region of $65 million to $70 million".
In a statement released by MTN, Ahmad Farroukh, CEO of MTN Nigeria, says: "This acquisition is strategic to maintaining our leadership position in the telecoms industry [in Nigeria]."
The purchase will enable MTN to benefit from a universal access service licence (UASL), introduced by the Nigerian Communication Commission (NCC) last year, says Omogbenigun.
"MTN Nigeria is taking advantage of the opportunities resulting from the new UASL regime."
Triple-play services
The NCC granted UASLs to 10 telecommunications operators - to open more commercially viable opportunities in the telecommunications services spectrum market - with VGC Communications being one of them.
The UASL allows the operator to provide a bouquet of triple-play services. VGC Communications also has licences for private network links, cabling services, Internet service, payphones services, prepaid card services, a domestic VSAT licence and international gateway licences, according to its Web site.
The company has access network infrastructure in the key commercial cities of Nigeria, which will enable MTN Nigeria to target corporates by providing advance data services.
Farroukh hints MTN Nigeria will make further investments to extend the fixed access network reach into other commercial cities. Following the deal, MTN Nigeria takes on over 20 000 private and corporate subscribers in the commercial city of Lagos.
"Although the acquisition has not increased MTN's subscriber base in a significant way, it will give the company a major inroad into the corporate market with data-centric communications requirements," says Omogbenigun.
MTN Nigeria recorded 12 million subscribers at the end of December.
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