MTN buys internet provider Visafone of Nigeria as court mulls $3.9 billion penalty

Lagos-based Visafone was founded in 2007 by Jim Ovia, a Nigerian businessman who also created Zenith Bank

MTN Group has agreed to buy Internet provider Visafone Communications of Nigeria to expand in Africa’s biggest economy even as the South African company awaits a local court ruling on a record $3.9 billion fine in its biggest market.

The acquisition will ensure that “Nigerians experience a boost in the quality of broadband Internet services” and data speeds, MTN Nigeria Executive Amina Oyagbola said in an e-mailed statement on Friday, without disclosing terms. Visafone offers voice as well as online services in Nigeria, according to the statement.

MTN said Dec. 17 it will ask a Lagos court to rule on the fine, which was imposed by the Nigerian telecommunications regulator for failing to meet a deadline to disconnect 5.1 million unregistered subscribers. The initial fine of $5.2 billion was reduced by 25% earlier in December following talks with the regulator led by MTN Chairman Phuthuma Nhleko.

MTN shares have declined 34% since the fine was made public on Oct. 26, valuing the company at 232 billion rand ($14.5 billion).

Lagos-based Visafone is a wireless network provider founded in 2007 by Jim Ovia, a Nigerian businessman who also created Zenith Bank Plc.

MTN had about 62.5 million subscribers in Nigeria at the end of September, almost a quarter of the total of 233 million customers.

-Bloomberg

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