Telecommunication giant MTN Group is in talks to buy Nigeria’s Visafone Communications to solidify its grip in the South African firm’s most important market, sources familiar with the discussions said on Friday.
Wireless-network operator Visafone was set up eight years ago to deliver voice and broadband services through mobile and fixed telecom platforms after business tycoon Jim Ovia, who also founded Zenith Bank, acquired three operators.
“The deal is done. We’re almost putting ink to paper,” a source close to the deal said.
Another source said the talks would conclude “very soon”.
Both sources did not say how much MTN would spend on the purchase and how big a stake in Visafone it would take up.
MTN spokesman Chris Maroleng said the company did not comment on market speculation.
Visafone officials were not immediately available to confirm whether the firm was involved in discussions.
Visafone grew its subscriber base from 30,000 after the acquisitions in 2007, to 2.2 million at the end of 2014, data from the telecom’s regulator showed.
But fixed wireless operators with CDMA technology platforms most suited for broadband and data services have faced stiff competition from more established rivals such as India’s Bharti Airtel, Dubai-based Etisalat and MTN, hitting the industry’s average revenue per user (ARPU).
ARPU, a key gauge of telecoms firms’ competitiveness as well as of consumer spending trends, has declined over the past three years to $5 from $8 as competition deepens.
MTN had nearly 60 million users in Nigeria in 2014, about 27 percent of its entire subscriber base across 22 countries.
Africa’s most populous country is also the biggest contributor to MTN’s revenue, providing more than a third of overall turnover.
MTN shares were down 0.4 percent at 1200 GMT and are flat so far this year.