Court rejects Etisalat’s challenge of MTN-Visafone deal

26 Feb 2016

The Federal High Court in Lagos has rejected a lawsuit filed by Etisalat Nigeria challenging the acquisition of CDMA network operator Visafone by mobile market leader MTN, reports local newspaper This Day. Earlier this month Etisalat revealed it had launched legal action against the takeover, arguing that the move would consolidate MTN’s dominance in the retail data services market, as Visafone holds LTE-suitable 800MHz spectrum, which would give the South African-owned cellco an unfair advantage in rolling out 4G mobile broadband services. In response, MTN filed a notice of preliminary objection, arguing that the court did not have jurisdiction to entertain the suit. In the latest development on the matter, Justice Ibrahim Buba has rejected Etisalat’s challenge on the grounds that the Nigerian Communications Commission (NCC), which has exclusive power to regulate the telecoms sector, was not included as a party in the lawsuit.

As previously reported by CommsUpdate, MTN Group completed the process of acquiring Lagos-based Visafone, which was formed in June 2007 by Nigerian businessman Jim Ovia, at the start of this year, after the transaction was approved by the NCC. In recent years, Visafone has faced increasing competition from more popular GSM-based services; mobile subscriber numbers have fallen gradually since reaching a peak of 2.801 million at mid-2009, dropping to 2.03 million by the end of September 2015 to give it a market share of just 1.3%, compared to MTN Nigeria with 62.49 million subscribers (41.5%) at the same date.